get crm right the first time: best practices for crm success steve bonadio senior program director...
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Get CRM Right The First Time: Best Practices for CRM Success
Steve BonadioSenior Program DirectorEnterprise Application StrategiesMETA Group
steven.bonadio@metagroup.com
Business & Technology Scenario
CRM continues to be a strategic priority
Risk-tolerant early adopters have given way to pragmatic, risk-adverse, and more moderate organizations
CRM investment is bifurcated between tactical LOB projects and CRM “infrastructure”
Prevailing economic conditions are mandating hard ROI vs. “leap of faith”
CRM technology is maturing, yet continues to evolve
Critical Issues
Developing a CRM Strategy
Avoiding CRM Program Failure
Rationalizing CRM Technology
Develop a CRM Strategy: Design Around the Customer
Best-Practice CRM Principles
Derive customer patterns by applying “ETFS” as a lens to drive sales, service, marketing and commerce chain process
Anchor offer, channel, and business processes around customer patterns
Technology-enable customer relationship with CRM ecosystem
Customer Life Cycle Management (CLCM)
as a Three-Domain Business System
Engage
Service
Customer Life Cycle
Fulfill
TransactCust.Pattern
Channels & “POIs”
Sales
“Offer”
Customer-RelatedBusiness Processes
Mktg. Service
CRM Technology“Ecosystem”
CollaborativeAnalytical
Operational
CRM is not an IT project — it is an iterative and continual transformation of people, process and technology
Building the CRM Business Plan
Addresses three basic ideas:• Business vision —
How do we want to treat customers?
• Business design — How do we want to (re)engineer our business to enable customer treatment?
• Technology enablement — How will technology support the new design?
Organizational Constructs: Program Management Office and Chief Customer Officer.
Strategic Fit:Strategic Fit:CustomerCustomerPhilosophyPhilosophy
Brand and CRMBrand and CRM
Customer ValueCustomer ValuePropositionProposition
Schedule and PortfolioSchedule and Portfolio
Strategic PartnersStrategic Partners
Legal, Regulatory ImpactLegal, Regulatory Impact
Staffing and OrganizationStaffing and Organization
Competitive AnalysisCompetitive Analysis
MarketMarket ResearchResearchOpportunity OutlineOpportunity Outline
Financial AnalysisFinancial AnalysisRisksRisks
Critical Success FactorsCritical Success Factors
Value MeasurementValue Measurement
Construct CRM business plan iteratively; it does not have to be a novel, but must codify (and value) future customer strategies
Business Plan T.O.C.
Assessing CRM Capabilities Maturity Assessment
• Measures the maturity of CRM program methods and how well it has been institutionalized relative to others in similar industries
• Helps predict failures and recommends remedies
Readiness Assessment
• Gauges how well the CRM program concepts will be accepted and indoctrinated within the organization
• Collect and plot key indicator values along eight dimensions
• Look for dimensions in the “danger zone” and a high degree of inconsistency
Leadership/ Sponsorship Culture Process Resources Value Knowledge Technical Architecture
Strength (green)
Weakness (red)
Caution (yellow)
Assessing true CRM capabilities requires looking at both CRM maturity and CRM readiness
CRM Readiness: Sample
Increase Increase RevenuesRevenuesIncrease Increase RevenuesRevenues
Reduce Reduce CostsCosts
Reduce Reduce CostsCosts Increase speed to marketIncrease speed to marketIncrease speed to marketIncrease speed to market
Reduce customer contact/ Reduce customer contact/ support requirementssupport requirements
Reduce customer contact/ Reduce customer contact/ support requirementssupport requirements
Reduce fulfillment and Reduce fulfillment and customer response errorscustomer response errors
Reduce fulfillment and Reduce fulfillment and customer response errorscustomer response errors
DriverDirect Direct Revenue Revenue
ImpactImpact
Direct Direct Revenue Revenue
ImpactImpact
IndirectIndirectRevenueRevenue Impact Impact
IndirectIndirectRevenueRevenue Impact Impact
Direct CostDirect CostReductionReduction
Direct CostDirect CostReductionReduction
Indirect Cost Indirect Cost ReductionReduction
Indirect Cost Indirect Cost ReductionReduction
Acquire new customersAcquire new customersAcquire new customersAcquire new customers
Increase revenues from Increase revenues from existing customersexisting customers
Increase revenues from Increase revenues from existing customersexisting customers
Develop new products Develop new products and servicesand services
Develop new products Develop new products and servicesand services
Increase Increase brand awarenessbrand awareness
Increase Increase brand awarenessbrand awareness
Increase Increase brand perceptionsbrand perceptions
Increase Increase brand perceptionsbrand perceptions
Increase Increase customer satisfactioncustomer satisfaction
Increase Increase customer satisfactioncustomer satisfaction
Increase Increase loyalty of customersloyalty of customers
Increase Increase loyalty of customersloyalty of customers
Improve productivityImprove productivityImprove productivityImprove productivity
Displace costsDisplace costsDisplace costsDisplace costs
Reduce capital Reduce capital requirementsrequirements
Reduce capital Reduce capital requirementsrequirements
What About CRM Value? CRM investment is justified by
top- and bottom-line impact
CRM creates business value through “hard,” “soft,” and “hybrid” returns• Hard: Preferred, but difficult• Soft: Easier, but lack
credibility• Hybrid: Viable, but require
KPI consensus
Most credible/ measurable ROI• Cost displacement• Customer penetration/wallet
share• Improved resource productivity
CRM value metrics must be incorporated into the business plan, monitored, and updated periodically
Avoiding CRM Program Failure
There are several identifiable early
warning signs that predict eventual
failure (and can guide you towards success). Learn how to identify these often surprising
red flag indicators, and the appropriate
mid-course corrections to avoid a potentially fatal CRM
situation.
Headline: CRM is Not Doomed to Failure!
People Still Make the Difference
Failure Warning Sign Recommendation
No executive support or visibility
Establish leadership (and accountability) by proactively seeking out executive support
Too many individual projects going on (usually in different directions)
Harness thematically related projects into a CRM program management office
IT-driven “hero culture” Apply reusable CRM program processes to avoid the “hero culture”
Not using a systems integrator
Use a systems integrator, at least to bootstrap early activities and leverage skills
Appropriate leadership to promote business/IT alignment and mitigate change impact on employees and groups is critical to CRM program
success
“Process” Is Not a Dirty WordFailure Warning Sign Recommendation
No business plan Create a CRM business plan, even if it’s initially just a few pages; Take no more than 4-6 weeks to develop initial plan
Substituting a vendor implementation methodology for a CRM methodology
Embrace a technology-neutral CRM methodology to encompass the big picture
No process re-engineering plan (or criteria by which to judge when to adopt vendor processes)
Create a process re-engineering plan and the criteria to ascertain when to adopt processes instantiated in applications vs. extending the application to handle unique processes
No metrics (developed in advance) Develop success metrics/KPIs, and embed them in CRM processes; Establish governance and accountability
Automating and optimizing customer processes is at the heart of CRM value delivery – Never automate a bad process!
Technology — It’s Not Simply “Add Water and Stir”Failure Warning Sign Recommendation
Over-customization of applications Configure (declaratively) and extend applications; Limit programmatic customization whenever possible
Lack of architectural standards Tap into enterprise architectural standards — if there are none, use CRM as an opportunity to begin developing them
No strategy for development, extension, and integration
Create a strategy for development, extension, and integration BEFORE implementing the application
No CDI approach Understanding who your customers are is a requirement of ALL CRM initiatives, although getting there is the ultimate challenge
CRM technology will ultimately support both people and process – Technology-only CRM strategies will fail
Rationalizing CRM Technology:The CRM Ecosystem
Cu
sto
mer
Inte
rac
tio
nF
ron
t O
ffic
eB
ack
Off
ice
Mo
bil
e O
ffic
e
Resp. Mgmt.Resp. Mgmt.Web ConfWeb Conf
E-MailConferencingVoiceVoice
(IVR, ACD)(IVR, ACD)WebWeb
StorefrontStorefront
Collaborative CRM
DirectDirect Interaction Interaction
1 4 1 4 1 44 41 41
ERP
SalesAutomation
ServiceAutomation
LegacySystems
MarketingAutomation
Mobile Sales
(prod cfg)
Field
Service
Operational CRM
Supply Chain Mgmt.
2 3
4
2 3
1 1
4 4
32
Order Mgmt.
Order Prom.
CampaignMgmt.
CustomerActivity
Data Mart
CustomerData Mart
ProductData Mart
DataWarehouse
Analytical CRM
CategoryMgmt.
1-4
1Vertical
AppsMarketing
Automation
Clo
sed
-Lo
op
Pro
cess
ing
(EA
I T
oo
lkit
s, E
mb
edd
ed/M
ob
ile
Ag
ents
)
There is no “ecosystem in a box”; CRM will remain a multi-vendor/product/domain effort for the foreseeable future.
Engage1
2
3
4
Fulfill
BuildingCLCM
Transact
Service
LegendCRM application
Non-CRM app.
Example
Integration
Exploring Operational CRM
Implement discrete CRM functions (e.g., sales, marketing, service) to enable management of customer: • Transactions• Interactions• Expectations
Surface and re-use underlying application services (e.g., business rules, workflow, various “engines”) to enable:• Integrated processes• Flexibility and re-use
Issue 1
CRM strategies mandate strong support for operational services to automate customer-related business processes
Operational CRM Domains
CIC/Call Center (agent-facing)
Campaign Mgmt./EMM
Channel/Partner Mgmt.
Incentive Mgmt. Product
Configuration Sales Automation Service Automation
(live and field)
Exploring Collaborative CRM Implement portals to enable UI
aggregation and contextual navigation
Develop multi-channel interfaces to enrich interactions and increase exit barriers
Infuse personalization into all customer interactions
Organize content and knowledge for use by customers and employees
Issue 1
Exploit collaboration to enable rich interactions with customers and to improve communication and information sharing
CIC/Call Center (customer-facing)
Content/Knowledge Mgmt.
Customer Interaction Mgmt.
Personalization Portals Service Automation
(e-service)
Collaborative CRM Domains
Exploring Analytical CRM
Leverage analytical applications to recognize customer behavior patterns
Support multiple analytical methods (e.g., reporting, OLAP, data mining)
Build a strong foundation (e.g., DW) to enable analytical CRM
Implement effective data management (e.g., ETL) strategies
Issue 1
CRM will fail without support for analytics — leverage existing infrastructure to jump-start analytical CRM
Balanced Scorecard Behavior modeling &
profiling Data Mining &
Recommendations Marketing
Segmentation ScoringPlanning/Analysis
Performance Measurement
Reporting/OLAP
Analytical CRM Domains
Rationalizing CRM Integration Approaches Plan integration strategy
early• CRM integration can
account for 60% of total implementation cost
Recognize that integration methods, costs, and effort varies dramatically
Use customer patterns and ETFS processes to ascertain integration scenarios
CRM Integration Domains
Operational/Analytical
AcrossChannel
Internal/External
Front Office/Back Office Batch, API, EAI
Batch, API,Portal
API, EAI, CTI
Batch, ETL
Integration technology is the glue that binds people, process, and technology
To Get CRM Right, Enterprises Should. . .
TRANSFORMATION STEPS
Refocus on business and CRM planning to align
existing technology investments to enterprise
goals
Avoid potential failure by perceiving early warning
signs
Automate and optimize business processes, while
developing a framework to manage customer data
To Get CRM Right, Enterprises Should. . .(continued)
Business Impact: CRM is a business strategy that will transform your business; Understand this fact and you’re on
your way to program success
TRANSFORMATION STEPS
Rapidly sense and respond to environmental
change through tightly coupled analytics
Expose collaborative interfaces (e.g., portals,
touch-point synchronization) to enrich interactions
Pull everything together by fixating on integration
Next Steps
Attend META Group’s Events
• METAmorphosis 2004 — The Adaptive Organization: Building Value by Remodeling for IT Flexibility
• See metagroup.com for dates and locations
Listen to Upcoming Webcasts and Teleconferences• Connect With metagroup.com/events for Details
• Contact Your Client Services Representative
Next Steps (continued)
Engage META Group’s Analysts and Consultants• Teleconference
• Half-Day, On-Site Briefing
Browse Related Research • Connect With META Group’s Enterprise Applications
Resource Center on metagroup.com
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