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Customer Relationship Management.gif (1808 bytes)

February 2000

 

Selecting And Buying CRM Software

BY JACK MCAVOY, PEGASYSTEMS

Customer relationship management is the key to creating a successful business. CRM, however, requires a comprehensive strategy, carefully designed business practices and integration with existing applications and contact channels.

Managing and enhancing customer relationships is increasingly important as a market differentiator. In recent years, CIOs and business unit managers have been asked to select solutions that increase productivity and enhance the quality of customer interactions. But today�s competitive landscape is changing, and they are now being asked to take that challenge to the next level. Customer relationship management is critical to achieving success in today�s businesses. Selecting the right CRM software has moved from a tactical departmental solution to an enterprisewide strategy. The software that is selected will be the foundation of the company�s customer service strategy and the means by which they can take that service to the next level. The stakes have never been higher. You have many choices and alternatives, so it is crucial to think seriously before buying.

According to industry studies, the most successful organizations will be those with a strategy that automates � and makes consistent � their sales, service and marketing business processes throughout the entire enterprise. Developing a strategy is not a simple departmental task. An effective CRM strategy may require a dramatic shift in organizational focus, from a departmental- or product-centered view to one that places the customer at the center. Development of this strategy requires participation and buy-in at all levels, especially senior management. AMR Research stated the following:

CRM must come from the top. CRM is an all-encompassing strategy, and no one department, call center or information technology (IT) manager can drive the cross-functional process changes required. Bottom-up implementations may optimize local needs, but optimizing efforts to benefit customers means that some parts of the business will not be as efficient as they were while others do better. Such choices are made in the boardroom. A recent study showed CEOs were directly involved in successful CRM initiatives more than 40 percent of the time.1

While you may not choose to implement a wide-ranging strategy all at once, you should recognize the necessity of thinking broadly. Concentrating on a strategy within the call center and over the Web, integrating back-office processing with front-office delivery functions and using solutions that are flexible and scalable constitute a good beginning. But to achieve enterprisewide benefits from CRM, organizations must link customer and prospect information with disparate business-unit databases. Better information � and timely, consistent delivery of that information � benefits the customer and increases customer loyalty and retention. In turn, increased customer retention increases profitability. Enterprises that purchase CRM solutions that are not flexible, scalable, extensible and that do not integrate their operations will ultimately be unable to respond to competitive pressure and will fail.

What Constitutes A Successful CRM Implementation?
According to GartnerGroup, a successful implementation enables an enterprise to use customer data to match enterprise resources to customer needs in an optimal manner. This requires that customer data � such as descriptive data (e.g., who, where, how old and how rich), transactional data (e.g., purchases, costs and channels) and interactional data (e.g., service requests and sales offers) � be collected throughout the enterprise and analyzed to turn it into meaningful information. Following that effort, a customer relationship strategy is developed to support high-quality interactions across several channels.2

As you begin to develop your strategy, you must incorporate the following concepts and requirements.

The strategy must extend across all channels. While one particular channel may be your first priority, ultimately all channels must be involved (call center, Web, kiosk, sales and service departments, partners, and more).

Service delivery must be consistent across all channels. Service-level quality and timeliness standards that differ from the Web to the contact center to the individual sales office let your customer know that you are not serious about providing them with flexible options.

Your solution should result in a holistic view of the customer. At the same time, it should provide contact personnel all the information they need to handle each customer interaction. This includes service information as well as customer and account data.

Your solution must improve the level of service by performing real work rather than merely tracking and routing service requests.

It must provide the highest degree of accuracy and reliability. Effective self-service options must be included.

It must seamlessly integrate the front office with back-office systems.

It must accommodate unique and ever-changing business requirements.

It must grow with you.

To summarize, your CRM strategic objectives should be to maximize the effectiveness and productivity of all channels, deliver stellar service, increase selling time with each customer, enable better communication and information sharing between sales, service and marketing, decrease sales cycles and achieve higher call-to-sale ratios.

Once you are comfortable that you have a well-planned strategic vision, you must next translate that vision into evaluation criteria that can be applied to your search for appropriate CRM software solutions. Consider the following:

Extending your solution across all channels. A robust CRM solution must integrate customer service representatives, sales associates, voice response units, Web self-service, branch platform and back-office personnel, and even support ATMs and kiosks. Customers demand consistent service. Stay away from CRM vendors who look at only the call center, or only at the Web. Integration � and using best and consistent processes across all channels � is the key.

Delivering consistent service across channels. Look for an integrated solution that enables you to share business rules and processes across the organization wherever appropriate. But be careful: You don�t want to dictate rules to business units where they don�t make sense. Flexibility to adapt the rules to individual area needs is crucial.

Creating a holistic customer view. CRM solutions must bring together all of a customer�s transactions into a single view so that the context of his or her activities is always visible to whomever is dealing with any aspect of that customer relationship. CRM solutions must also capture, analyze and help you understand the behavior of that customer and target products or offers that will be of genuine interest. This requires a strong data management philosophy and smooth workflow that allows actions to be based upon customer events. Don�t overlook existing resources and systems. You probably have valuable information in existing data warehouses and historical transaction databases that should be incorporated into your customer view.

Improving the level of service by performing real work. Workflow is integral to CRM applications. Look for robustness. And beware of vendors who exclusively equate workflow with routing. Today�s systems can be far better. Again, be sure to select a system in which rules define and drive the business processes. Remember that rules allow you to add new functionality quickly and easily, creating competitive advantage without the costs associated with de novo development or package integration. A CRM solution that incorporates workflow, supports product and service delivery at each touchpoint, allowing critical tasks to not only be initiated, but actually performed, eliminates the error-prone handoffs and costs associated with executing these routine yet critical activities. Sales and service tasks are performed consistently, accurately and efficiently � redefining the customer interaction �moment of truth� from error avoidance to value-added needs anticipation and an understanding of the customer�s financial objectives. Sales and service personnel can perform functions ranging from basic service to prospect profiling, suitability analysis and account opening through stop-payment entry, beneficiary change, fund redemption and trade entry, as appropriate to their business function and skill levels.

Providing the highest degree of accuracy and reliability. Delivering a superior level of service means that your sales and service personnel must have access to real-time updates, complete information, appropriate customer and transaction history and audit trails that explain each step in the service process.

Including effective self-service options. Self-service is a �win-win� concept for both you and your customers. You win by lowering the cost of providing service, they win by gaining a new level of convenience and autonomy. Therefore, be sure to include plans for a comprehensive self-service option that includes both IVR (interactive voice response) and Web self-service options. To be successful, this option must truly support an acceptable level of service activity and options. Customers should be able to have the same comprehensive view of their data that your internal staff can access. Not only should your solution provide integrated Web capabilities to provide a self-service channel to customers, but it should also incorporate automated workflow so that customers can truly perform work rather than merely log their service requests and wait for a response. Your customers should be able to execute the same business processes as your call center representatives.

Seamlessly integrating the front and back office. Today�s organizations are large and complex. They typically incorporate many different business units, departments and service areas. Each business unit may have its own complex set of systems, applications and hardware platforms. You cannot provide a superior level of service if your customer is forced to wait while your service agents navigate this complex maze. Connectivity and seamless integration are more important than before.

Accommodating unique and ever-changing business requirements. Every customer is different and every business is different. Therefore, every CRM solution must also be different. For that reason, it�s impossible for a CRM solution to be used �out of the box.� Customization will always be required, and as the solutions get bigger and more complex, the amount of customization will grow. The trick is to have a solution with the architecture and tools that enable customization. Since products change and competitive conditions fluctuate, your solution must be flexible and changeable. Be sure that your CRM solution embodies an easy-to-use rules set, enabling you to change all aspects of the system, from how an individual customer is managed, to how, when and from where back-office information is gathered. A CRM solution relies on information, so it must retrieve it from, and send it to, virtually any data source. The workflow solution encapsulates system interfaces and normalizes host data to create a 360 degree view of the customer. Also, be sure that your CRM solution is based on an XML architecture that normalizes and standardizes the data before presentation to the call center agent or customer, or in a self-service environment.

Growing with you. To survive, your business must grow. Customers, staff, interactions and requests increase each year. Mergers and acquisitions will bring new customers, systems, networks and data repositories. When selecting a CRM system, determine if its architecture will support this growth. Inquire about production usage, concurrent users, n-tier approach. Be sure that it can grow, extend to and accommodate thousands of simultaneous users, sharing information and work queues across multiple contact centers. Make sure that its connectivity options are flexible and easy to extend to rapidly assimilate merged companies.

To summarize, don�t limit your solution to your immediate business objectives. This may result in some short-term benefits, but eventually it can interfere with your ultimate success. Start with a well-planned customer service strategy that is driven from the top. Be sure that your strategy is comprehensive, wide-ranging and well-defined. Once that strategy has been defined, use it to define your software evaluation criteria.

Make sure that the software you select supports the entire strategy, and be clear about how you will shift your focus to a customer-centric approach. Then you will be well-positioned to quickly implement the solution in areas where you can achieve immediate benefits, and gradually extend the solution across the enterprise.

Jack McAvoy is vice president of communications for Pegasystems.

1 Surviving in an E-Business World. AMR Research, Inc. 1999.
2 Strategic Analysis Report. GartnerGroup, September 27, 1999, W. Close and C. Claps.

 







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