Executing An Integrated E-CRM
Infrastructure
BY RENE L. WHITE, ECONVERGENT
The Internet is fundamentally changing the relationship between buyer
and seller. This change is driving two primary transitions in the customer
relationship management market which, in turn, are dramatically improving
the effectiveness, productivity and value of customer relationships.
First, multichannel customer interaction systems that combine
telephone, the Internet, e-mail, fax and chat are quickly replacing
traditional customer interaction methodologies, such as voice-only call
centers, Internet-only electronic services and sales channels as customer
communications channels. Through direct customer interaction, companies
can create high-value, life-long-term customer relationships and deliver
new and higher levels of customer satisfaction. With the new generation of
more high-touch technologies, companies can provide personalized services
and improved problem solving and are moving closer to their customers.
Characterized by many as the move from customer relationship management
(CRM), to eCRM, this change is not limited to a small number of "dot
com" businesses. With growing numbers of traditional brick-and-mortar
businesses creating electronic commerce operations, and virtually every
organization either implementing or planning on implementing a
business-to-business or business-to-consumer e-commerce strategy, eCRM
will likely touch virtually every company that has customers.
Second, the Internet is changing the way companies deploy IT solutions,
with Web-based business services quickly replacing packaged software as a
primary technology delivery vehicle. In the recent past, organizations had
little choice other than selecting, integrating and deploying costly and
complex packaged enterprise software applications for a wide range of
business functions -- from front-office CRM to back-office enterprise
resource planning (ERP). Typically, these applications have required
months or years of deployment time and cost millions of dollars. While the
productivity gains derived from these applications have played a role in
improving efficiency and productivity, deployment time and cost continue
to remain significant obstacles.
In response, a number of technology providers have created a new type
of business solution. Rather than creating software products, these
suppliers are creating more complete business solutions that are accessed
through the Internet and can be deployed in shorter time scales. More than
simply hosting existing enterprise applications, these business solutions
offer a blend of multiple technologies, custom content and proprietary
business methodologies. These new solutions aim to cut the time required
to create a business infrastructure from years to months, or even weeks.
In this article, I'll discuss the impact of these trends and how
e-businesses and traditional brick-and-mortar businesses can use them to
their advantage.
The Rise Of eCRM
"eCRM will be the difference
between winners and losers in the e-business world of the 21st
Century." -- Alex Brown, Equity Research, November 1999
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For e-businesses, 2000 will show a dramatic shift in emphasis from
customer acquisition to customer retention and satisfaction. While the
Internet "land grab" will continue unabated for years to come,
some companies are beginning to realize that repeat business from existing
customers and a growing share of a customer's overall purchases will be
the key differentiators in e-businesses reaching profitability. In the
long run, customer satisfaction, and the company's ability to leverage
technology to help deliver the ultimate customer experience, will be an
essential component in driving overall company valuation.
To meet this challenge, e-businesses will have to master multiple
communications channels and provide their customers with an effortless
range of communications options. In the Internet economy, it is not good
enough to offer only telephone support or Internet support. It is almost
as inefficient to offer both options, but not allow customers to move
between the two communication channels. Customers will not only want to
interact with their suppliers through multiple media, they will demand the
ability to seamlessly move from one medium to another -- at will and
without warning.
For example, a customer must be allowed to start a transaction on the
Internet, receive instructions from an agent using real-time chat, click
on a button to have a telephone conversation with that agent to answer a
question, then move back to the Internet to complete the transaction.
Whether the requirement is acquiring a new customer with their first
order, customer service, field service, e-marketing, credit status, sales
force automation or order delivery status, tomorrow's business must
provide customers, partners and suppliers with the flexibility of
integrated Internet, telephone, e-mail, fax and EDI interaction.
A Single View
In addition to providing the customer with flexible and seamless
interaction options, the business must also provide its internal personnel
with a single view of this multichannel interaction. To be effective, the
e-business eCRM infrastructure must provide internal personnel with a
single view of the customer, regardless of how they are interacting with
the company and which CRM applications they are using.
In an era of personalized, one-to-one commerce, it will also be critical
for the e-business to maintain a single repository for collecting customer
behavior and business analytics. While many e-businesses have systems and
plans for collecting e-commerce business intelligence within a single
communication medium, it will be essential that these systems be able to
continue to collect business information as customers become increasingly
mobile between e-mail, the Internet, the telephone and then back.
The Time To Move Is Now
For new e-businesses or traditional businesses executing e-commerce
strategies, the time to start planning an eCRM infrastructure was
yesterday.
Historically, businesses have had two options. First, they could integrate
various point products from multiple vendors, then either integrate a
solution in-house or work with an external systems integration firm.
Second, they could create a custom solution, either in-house or through a
custom consulting engagement.
While the point product solution is the lower cost of the two, it can
represent an elevated risk and reduced success rate. Using today's CRM
integration process, it can take two years or more for a company to plan,
integrate and deploy a rich CRM system. With vendor selection, architecture
development, application integration and client environment integration,
the task is complex.
Additionally, this approach requires the coordination of a number of
individual technologies and products. In the event that any one technology
failed, the company would be required to replace the technology and
possibly redesign the system architecture. Finally, and perhaps most
compellingly, any solution based on multiple commercial technologies will
be very difficult for a company to integrate into a single, seamless
system with a common data storage, business intelligence and system
management approach.
Fully custom solutions have the advantage of providing an integrated
system architecture, but have historically been characterized by higher
deployment costs, longer deployment schedules and, in a time of rapid
technology changes, higher maintenance costs.
From Software To Internet-Based Services -- The New Business Model
The business solution provider (BSP) model offers a new approach. By
blending technology with the services needed to manage and evolve, the BSP
can provide the sophistication and integration advantages of a custom
approach with the rapid deployment and cost-effectiveness of a basic
hosted application. According to Red Herring magazine, the migration from
software to services will be one of the most important trends of 2000. It
can be assumed that the BSP will take the leadership role in delivering
the next-generation of technology services.
The typical BSP is able to leverage significant domain expertise to create
a complete business solution. Acting as a "super customer," the
BSP builds a predesigned service architecture that captures industrywide
best-practice, then determines the best-of-class products that work within
that architecture. Wherever necessary, the BSP can create custom
technology and content that further capture its workflow methodology.
Over the coming months, BSPs will emerge in a range of markets, including
front-office eCRM, human resources, accounting, IT procurement and
marketing.
The eCRM Business Solution Provider
The eCRM business solution provider should address all aspects of the
customer interaction infrastructure in a single, seamless solution. The
eCRM service it provides blends multichannel customer interaction with
closed-loop customer analytics and unified administration and reporting.
Additionally, a BSP can offer a range of business processes, eCRM
methodology and workflow consulting and integration services in addition
to the ongoing support and services required to run a customer interaction
center and evolve the technology.
Putting The 80/20 Rule To Your Advantage
In addition to providing the tactical advantages of rapid deployment and
low up-front costs, the eCRM services approach can deliver other strategic
advantages.
Companies are spending as much as 80 percent of their technical resources
on tactical software issues, such as vendor and product selection. By
working with a BSP, companies can quickly deploy a quality eCRM
infrastructure and shift their focus to providing an improved customer
experience and create more loyal customers while leveraging their
e-business expertise. The company that invests 80 percent of its technical
resources on the customer will have the clear advantage.
Companies are investing as much as 80 percent of their integration
resources on making multiple enterprise applications work together, and
only 20 percent of these resources integrating their eCRM solution with
the company's business and customer interaction processes. With
significant domain expertise, the BSP can help the company improve its
workflow and process and provide its customers with a positive experience
every time they go online.
The companies that can make the shift from 80 percent tactical to 80
percent strategic can create a fundamental competitive advantage. There
are a number of areas where the eCRM BSP can help companies make that
80/20 shift.
Finally, the BSP enables companies to shift their emphasis from customer
acquisition to customer satisfaction and retention. As previously noted,
customer satisfaction will be the single most important factor in
e-business profitability and, ultimately, company valuation in 2000. The
companies that master customer satisfaction will be well-positioned to be
tomorrow's winners.
Rene L. White is senior vice president of marketing at eConvergent.
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