ceo - reinventing customer relationship roundtable · 14 ibm ceo roundtable cmo, marketing ops,...

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CEO - Reinventing Customer Relationship Roundtable

Pravin Patel, Associate PartnerIBM GBS BAO ASEAN

2 IBM CEO Roundtable

Today’s Agenda

Capitalizing on Complexity – IBM CEO studyCapitalizing on Complexity Capitalizing on Complexity –– IBM CEO studyIBM CEO study

How Analytics and Analysis Can HelpHow Analytics and Analysis Can HelpHow Analytics and Analysis Can Help

IBM Business Analytic SolutionIBM IBM Business Analytic SolutionBusiness Analytic Solution

Why IBM?Why IBM?Why IBM?


IBM 2010 CEO study - vast majority experience the New E conomic Environment as distinctly different

More volatileDeeper/faster cycles, more risk

More uncertainLess predictable

More complexMulti-faceted, interconnected

Structurally differentSustained change

Not at all/to a limited extent To a large/very large extentTo some extent

“Last year’s experience was a wake-up call, like looking into the dark with no light at the end of the tunnel.”

President and CEO, Industrial Products, The Netherlands

18%13% 69%

21%14% 65%

22%18% 60%

21%26% 53%

The New Economic Environment

2010Capitalizing on Complexity


Uncertainty – The New NormalVelocity and Volatility

“Over 60% of Executives believe that when the recovery takes hold, the heightened uncertainty in the business will remain.”

Duke University Business Outlook, September 2009

Sense that volatility, uncertainty and risk are going to be part of the new economic

landscape.

The world has been transformed from a series of loosely connected economies with reasonably predictable flows between them to a complex web of relationships where the global impact of local events is felt almost instantaneously.


Standout organisations capitalize on complexity in three ways

• “Getting closer to customers” is the single most important theme.

• Better understand customer needs through collaboration and info sharing.

• Exploit the information explosion to deliver unprecedented customer service.

2010Capitalizing on Complexity

Key Findings

Rapid escalation of complexity creates need to:

� Embody creative leadership�Reinvent customer

relationships� Build operating dexterity

Business Imperative


CEOs want to better understand customer needs and actively work with them

12%82% 6%Better understanding of needs

20%70% 10%New or different services

20%69% 11%More collaboration, information sharing

22%61% 17%New or different products

25%51% 24%New or different channels

24%45% 31%Stronger focus on price-value equation

30%46% 24%Increased focus on social responsibility

Not at all/to a limited extentTo a large/very large extent To some extent

CEOs’ view of “How customer expectations will change over the next 5 years”

All participants:


Customer Information lacking to support consistent & shared view

Source: Business Analytics Product Marketing global survey June 2010 with Marketing Line of Business

0 10 20 30 40 50

No Common Shared Visibility isAvailable

Yes through spreadsheets

Yes through manager/analystdashboards

Yes through reports

Survey Response %

42% of respondents did not share common view of the c ustomer.


So how do you reinvent customer relationships?

� Honor your customers above all else:Unprecedented level of focus, heightened customer exposure for every employee, measure what customers value.

� Use two-way collaboration to sync with customers:Make customers part of your team, solicit customer wants, co-innovate and interact with customers in new ways, deliver true process transparency.

� Profit from the information explosion:Tap the value of limitless data, use analytics to translate data into insight into action that creates business results, share information freely to build trust and improve customer relationships.

Recommendations

� How will you engage customers in new ways that increase interest and loyalty to generate new demand and revenue sources?

� How can you involve customers more effectively and directly in product and service development?

� Can you hear the voice of your customers through the vast amount of data? Can you understand and act upon the information?

Tough questions to consider


Today’s Agenda



IBM Business Analytic SolutionIBM IBM Business AnalyticBusiness Analytic SolutionSolution



How Analytics and Analysis Can Help

Analytics can be used to signify many different things including:

– Particular BI capability or technique, especially a more advanced technique such as data mining or predictive.

– Business strategy of using analysis to address a particular business problem.

– Analytics applications – a collection of packaged BI capabilitiesfor a particular domain or business process.

– The entire domain, spanning hardware, software, personnel and processes.

Gareth Herschel, Gartner 2010


• Who are our customers?

• What’s their buying behavior?

• What are their product/channel/pricing affinities?

• When do customers respond to promotions?

• Which customer group offers the highest total and a verage revenue and margin contribution?

• Which customers are most profitable?

Historical Trending and Analysis – Multidimensional Data Model –Adhoc/Standard Query, Reporting and Analysis .

Business Driver:Increase Revenue

Customer Analysis: Current State


Customer Analysis: Current State

• What are our best performing channels?• What is our customer churn?

– Product/service– Geography– Channel– Demographics/psychographics

• What are our most effective promotions/programs?• When and in what channel do customers respond to pr omotions? • What are our service costs per channel? Per custome r group?

Historical Trending and Analysis – Multidimensional Data Model –Adhoc/standard Query, Reporting and Analysis.

Increase RevenueBusiness Driver:Decrease Costs

� Channel Analysis� Customer Churn Analysis� Marketing Program Analysis� Response Analysis� Cost to Serve Analysis


Sales Operations, Forecasting, Sales VP

• Need solutions that increase sales productivity and effectiveness.• Need accurate forecasts and visibility into all fac tors that affect

pipeline conversion rates.• Need ability to track, monitor sales trends in real time/historical

and understand drivers behind sales behavior.

Analysis, Reporting, Forecasting Challenges� Can’t retrieve information from Siebel/SFDC for easy opportunity and conversion

analysis.

� Can’t do necessary analysis from multiple sales forecasting, CRM, contact, ERP systems.

� Lack insight into elongating sales pipeline and conversion failures.� Sales processes complex – not well defined, undocumented.

What Sales Needs for Smarter Decisions� Accurate , improved information and insights across the sales pipeline.� Adaptable to my changing business requirements.� Fast time to market.� Functional fit for specific roles-based sales concerns.

Sales Director


CMO, Marketing Ops, Online Marketing, Marketing Programs

• Marketing needs to measure, monitor, analyze and co mmunicate campaign performance weekly/monthly/quarterly basis.

• Needs insight to understand response and conversion rate performance multi-dimensionally, i.e. across channels, geos, program vehicles, customer t ypes and lead gen costs.

• Need ability to engage in target market and custome r segmentation and analyze customer buying behavior, pricing, discount trending to adju st and fine tune market offering & messaging.

Analysis, Reporting, Monitoring, Predictive Challen ges� Cannot measure , monitor, analyze and communicate campaign performance/results weekly, monthly, quarterly

basis to key parties.

� Ability to analyze key contributing (limiting) factors into marketing conversion rates throughout the demand gen pipeline – what’s working & why?

� Cannot measure marketing program vehicle effectiveness.

� Lack a customer segmentation model which inhibits our ability to pursue target marketing and refine our offers/products.

� Means to identify/replicate proven upsell/cross sell strategies for product portfolio and communicate those strategies.

What Marketing Wants� Accurate , improved information and insights daily, in real time and in context to marketing business needs.� Ability to dynamically respond to changes in market demand/needs to support sales partners.� Fast time to market.� Functional fit for specific marketing roles

Marketing Director


Customer Service, Customer Care, Customer Loyalty and Call/Contact Center

• Track, analyze and take corrective action to addres s immediate concerns within Customer Service and the call center operations.

� Need to provide service to customers before, during and after a purchase. The function is designed to enhance the customer experience and maintain certai n levels of customer satisfaction in keeping with t he organisation’s customer value proposition.

� Understand customer satisfaction by having 360 degr ee visibility to the customer experience – seeing the issues via multiple, linked channels and being able to diagnose and address problems immediately when they occur.

� Monitor SLA KPIs in real time to provide optimal Cu stomer Service and Secure renewal revenue.

Analysis, Reporting, Monitoring, Predictive Challen ges� Lack of visibility in real time of key call/contact center operational metrics.� Lack of insight into customer churn, attrition, customer satisfaction.� Inability to see in real time 360 degree view of customer interactions.� Inability to maximize effectively agent utilization across contact centers in real time.� Unable to monitor SLAs within short timeframes (less than an hour).

What Customer Service Wants� Accurate , improved information and insights daily, in real time and in context to my call center/customer service

operational needs.� Ability to dynamically respond and align to changes in customer service/contact center to support optimally

functioning environment and maintain critical customer sat metrics/ratings.� Functional fit for specific customer service/contact center roles.

Customer Service Director


How Answers are Often Found

16

Why?

How are we doing?

What should we be doing?

INT

ER

NA

L DA

TA

EX

TE

RN

AL D

AT

A

Why?

How are we doing?

What should we be doing?

ERP

HR

RETAIL

AC NEILSON

TBS/DLB

CRM

CEO FINANCE


Today’s Agenda






Why are we on/off track?

How are we doing?

What should we do next?

IBM Cognos BI provides portfolio of capabilities to drive smarter business outcomes and critical customer insights

Executive Line of Business Manager

Business User

Manager Business Analyst

Financial Analyst


Scorecards & Dashboards Reports Real Time Monitoring

Immediate insights into business health

??Decide & Act

Decide & Act

What is happening?

IBM Cognos Business Intelligence What is Happening?


Decide & Act

Decide & Act

Why?Decide & Act

Decide & Act

Scorecards & Dashboards Content Analytics

Drill deeper and analyze why things are on- or off-track

Ad Hoc Query Trend & Statistical Analysis

IBM Cognos BI - Why is it happening? Ad Hoc Query & Analysis


Determining What you “Should be Doing”

• Replaces spreadsheet based, manual budgeting and planning.

• Connects operations and finance.

• Engages the whole organisation to make better informed decisions.

• Replaces rigid, annual budgeting with continuous planning for higher responsiveness.

• Supports best practices (e.g. driver based planning, rolling forecasts ).

• Offers packaged best practice Blueprints for processes inside and outside of Finance across industries.

• Rich client for improved user experience and personalization, and simplified deployment.

Planning, Budgeting and Forecasting

IBM CEO Roundtable

Packaged InsightAd-hoc Query

Analysis

Dashboards

Scorecards

Packaged AdaptableWarehouse

PREBUILT CONNECTORS

CONFIGURABLESOURCES

CONFIGURABLESOURCES

BUSINESS ANALYST

BUSINESS ANALYST

EXECUTIVES & MGMT SPECIALIST EXECUTIVES

& MGMT SPECIALIST

And More…Legacy

systemsAnd More…

Recruiting & Staffing

SAPSAPSAPSAP

Introducing - IBM Cognos Analytic Applications

IBM CEO Roundtable

Ad-hoc Query

Analysis

Dashboards

Scorecards

GeneratedInteractive Operational and Analytic Reports

Generated Warehouse

Generated ETL Code

BUSINESS ANALYST

BUSINESS ANALYST

EXECUTIVES & MGMT SPECIALIST EXECUTIVES

& MGMT SPECIALIST

PREBUILT CONNECTORS

CONFIGURABLESOURCES

CONFIGURABLESOURCES

And More…CompensationAnd More…Recruiting &

StaffingSAPSAPSAPSAP

Generated Semantic Layer

Introducing - IBM Cognos Analytic Applications


Over 43,000 Objects including

� 250+ Dimensions

� 850+ Metrics

� 230+ Defined Calculations

Adaptive Framework

� Unlimited Extensions

� Delivered ERP extraction

� Unlimited Data Sources

Generated Data Repository

1000+ Report Permutations

Financial Analytics� Ledger � Payables� Receivables� Cash Management� Customer/Vendor Risk

Workforce Analytics� Talent Development� Talent Management� Talent Retention� Workforce Strength� Compensation

Procurement Analytics� Spend Analysis� Vendor Analysis� Contract Management� Operational Efficiency

Sales Analytics� Pipeline Performance� Sales force Performance� Sales Segmentation� Customer Relations� Pricing and Program Analytics

What’s Included?

Open, Enterprise PlatformCommon Decision-Making Model

Seamless Business Intelligence

Source System

Packaged Reporting & AnalysisAnalytics Drill Through

IBM Cognos Analytic Applications


Sales Capabilities

IBM Cognos Customer Performance Sales Analytics

CUSTOMERSCUSTOMERS

PRODUCTSPRODUCTS

CHANNELSCHANNELS

PLAN / FORECASTPLAN / FORECAST

organisationorganisation

� Pricing Analysis� Marketing Program

Analysis

� Sales organisation Performance

� Sales Representative Performance

� Pipeline Health� Pipeline Conversion

� Channel Analysis� Product Analysis� Customer Analysis

� Customer Service� Fulfillment

Efficiency

Analysis DimensionsSALES PIPELINE PERFORMANCE

SALES FORCE PERFORMANCE

SALESSEGMENTATION

CUSTOMERRELATIONS

PRICING & PROGRAM PERFORMANCE

Business Drivers


Sales Segmentation

ANALYSIS PACKAGES INSIGHT TO BUSINESS QUESTIONS METRICS

• Which channel offers the highest total and average revenue and margin contribution?

• Are channel sales meeting or exceeding expectations ?• Are we penetrating the expected customer groups thr ough

these channels?• Are product sales plans within the channels being a chieved?

� Order Amount

� Order Cost

� Order Margin

� Customer Count

� Sales Forecast

� Variance to Forecast

� New Customer Orders

� New Product Orders

� Average Sales Profit per Product

� Average Sales Volume per Customer

…

Channel Analysis

• Which item categories offer the highest total and a verage revenue and margin contribution?

• Are item sales meeting or exceeding expectations?• What is the ranking of customer segments for these items?• What is the average revenue per channel for these i tems?

Item Analysis

• Which customer group offers the highest total and a verage revenue and margin contribution?

• Which products are customer groups buying?• What is the business profile for the customer?

Customer Analysis


Customer Relations

ANALYSIS PACKAGES INSIGHT TO BUSINESS QUESTIONS METRICS

• How well are our sales divisions doing at maintaini ng customer satisfaction over time?

• Are customers remaining active?

• Are we generating new customers?

• What has been the return pattern of our customer ba se?

• Which products are being returned? Which organisati onal unit is experiencing returns?

• What is the volume of shipments?

• Are we shipping on time to key customers?

� Average Order Cost per Customer

� Average Order Amount per customer

� Order Amount

� Order Cost

� Customer Count

� Lost Customer Count

� Returns Amount

� Late Shipment Count

� Return Rate

� Average Shipment Days Late

� Order to Ship Duration

…

Customer Service

• How efficiently are we delivering to the customer?

• What is the duration between fulfillment stages: fr om order to ship, and from ship to receipt?

Fulfillment Efficiency


Smarter Customer Insights

• Faster time-to-value with

packaged analytics.

• Information leveraged as a

strategic asset to affect

business change.

• Aligned business outcomes

to manage risk and controls.

• Smarter Decisions = Smarter

Business.


What is likely to happen?

There are times when only predictive analytics can deliver the kinds of insights needed to answer key customer-related questions:

� How do I reduce churn and retain my most loyal customers to maximize profitability?

� Which factors are most likely to drive customers to choose my product vs. the competitor’s?

� Which offers will my customers most likely respond to?

� Which channels are most effective for my different customer segments?

Predictive Analytics - IBM SPSS Customer Intimacy

The Final Step in the Customer Insight Continuum

Retail /Telco Flu/OJ Beer/Nappy’s


Information led business optimization applies exten sive capabilities across the organisation to turn raw data and information into decision-driving wisdom.

Degree of Implementation Complexity

Deg

ree

of im

pact

on

orga

nisa

tion

perf

orm

ance

Standard Reporting

Ad hoc reporting

Query/drill down

Alerts

Simulation

Forecasting

Predictive modeling

Optimization

What exactly is the problem?

What will happen next if ?

What if these trends continue?

What could happen…. ?

What actions are needed?

How many, how often, where?

What happened?

Stochastic Optimization

Adopted from: Competing on Analytics, Davenport and Harris, 2007

Descriptive

Prescriptive

Predictive

How can we achieve the best outcome?

How can we achieve the best outcome including the effects of variability?


Today’s Agenda






• Over $15B in software investments since 2005

IBM Business Analytics & Optimization

32

• Over $15B in software investments since 2005.

• New division for Business Analytics

• Over 4,000 dedicated Business Analytics and Optimization (BAO) consultants

• Creation of 6 BAO Analytic Solution Centers.


ASEAN Clients in 2009


ASEAN Clients 1H 2010


Brand Mgmt

Segmentation and clustering

Customer profiling

Media mix optimization;

Resource planning

Product feature assessment

Demand, Sales Planning and Forecasting

Merchandising and offering localization

Customer moments-of-truth, points-of-pain and satisfaction mgmt

Customer contacts and request routing

WWW/Branch/ Retail design

Tiered Treatment

• Customer Loyalty/Advocacy• Customer Acquisition• Cross/Up-Sell• Customer Retention/ Win-back

What organisations want Customer Insights

Marketing Analytics Sales Analytics Customer Exp /

Service AnalyticsCustomer Lifetime Value

Productivity

• Eliminate ineffective spend and non-productive customer contacts.

• Optimize productive customer contacts.

• Act at the right time for the best outcome.

organisations want their customers to buy, buy more and stay longer (and invite others to do the same)

Channel effectiveness and resource assignment / deployment

Next best action / offer

Campaign management

Sales targeting and lead management

Soc’l Ntwrk Analysis


IOD Software & Solutions; Information Infrastructure

BI/Performance Management; Advanced Analytic & Optimization Services

Information Agenda;BAO Strategy Services

Apply business

analytics to optimize

decisions

Establish a flexible

information platform

Plan an information

agenda

Industry out-performers are 8 times more likely to pursue information-led transformation at an enterprise level than industry under-performers

How Do you Get Started in an Information needs


Conclusion

• Customer Insight is a top of mind CEO imperative and is key agenda item for global “outperforming” organisations.

• Multiple adoption paths to develop customer insight within your organisation - BICC, sales and marketing line of business functions -choose one and get started!

• IBM’s Business Analytics portfolio can address, support and accelerate your understanding of your most strategic asset – your customer.

ceo - reinventing customer relationship roundtable · 14 ibm ceo roundtable cmo, marketing ops,...

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