Opinion: Office Working

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JD Edwards Colin Hudson maps the route to “one office”

Everywhere you turn today, you read articles about how businesses need to gain a competitive edge to survive and grow in these increasingly challenging commercial and economic circumstances. Industry analysts often say that customer retention is critical to survival – for instance, AMR Research recently stated that 75% of revenue comes from existing customers. For many organisations then, the most efficient route to growth comes via the protection and expansion of existing foundations. As these foundations are fundamentally embodied in a companies’ customer base, an effective Customer Relationship Management (CRM) solution can make the difference on how you utilise your best asset, the customer.

As customers, we all expect so much more from an organisation today. We don’t simply want differentiated products and services, but also differentiated business relationships and competitive pricing. We are no longer happy to pay higher costs that originate from supporting a fancy office or sales structure when we can get the same product for half the price over the web. Similarly, corresponding with the bank by email is often preferred to going in and spending hours with an account manager, especially when asking for credit! The way in which we wish to interact with a company has changed and our expectations are only set to go higher. So it’s not surprising that vendors talk about the holy grail of collaborative CRM as something that’s not too far off. Surely getting your core CRM systems in and working is old news then. Or is it?

Two weeks ago, I endured one of the most dissatisfying customer experiences of my life. Before calling a prominent telephone service provider to complain about an incorrect bill, I was only mildly annoyed and barely inconvenienced. By the time, I had finished my first - of many - telephone calls, I was extremely frustrated and very vocal in my displeasure. I’m sure that this is a familiar story to many of us, so I have to ask why the reality is still so different to the hype. Analyst firms and the technology media are always talking about the next phase of CRM – hold on a minute – shouldn’t organisations focus on getting the first phase working first?

CRM technology already offers a way to effectively manage relationships with customers. Through contact management and Business Intelligence, it’s possible to gather knowledge about customers so that organisations can begin to manipulate data to understand and anticipate customer behaviour and, as a result, provide effective and personalised services. However, a recent research project for J.D. Edwards by research firm Vanson Bourne, looked into the benefits provided by CRM and revealed an industry-wide sense of disappointment about CRM technology, with 85% of IT directors in the UK saying that their CRM application delivers the lowest level of business value to their management team.

The prime objective of any CRM solution is to integrate all customer-facing channels, be it a call centre, retail outlets, web sites or e-mail. Then, key capabilities such as billing, forecasting and customer profiling can be integrated to strengthen customer relationships at every point in a company’s customer value network. The result of this key capability integration is a CRM solution that supports a total customer lifecycle experience and creates the foundations for long-term, trust-based relationships. Yet many businesses have embarked on CRM software implementations and have failed to achieve this aim. Why?

If an organisation hopes to interact with its customers at every touchpoint, going beyond traditional CRM to provide a more holistic customer experience, it will have to learn to ignore the familiar concept of “front office” and “back office”. All applications that face or serve data to customers should be integrated. Consumers only want “one office” and who can blame them. To offer a world-class service to its customers, organisations have to develop a single view of the customer as well as presenting a single view of the company back to the outside world, which relies upon the successful integration of company data sources.

To do this, organisations can and should utilise a single data model to leverage existing information and to eliminate the duplication and scattering of data. Isolated information will result in a fragmented experience for the customer. The data inheritance model - which allows the inclusion of external databases into the core data model in a transparent manner - marks a move to a more inclusive and intelligence-led approach to CRM as it raises the quality of interaction between an organisation and its customers.

Most CRM vendors fail to deliver flexible and scalable systems that can be integrated with front or back-office applications from any other vendor. If there is no integration at the data level, then information will be duplicated within different systems, eliminating the possibility of providing true, real-time information and complicating management of customer data. In a best-of-breed environment, just how many account numbers will you need to identify a single customer and how many data models will support that requirement? This is a recipe for high-risk, high-cost, high-complexity projects, not to mention, being passed around and around the houses of said phone company, repeating the same information at every stage.

One of the alternatives is to adopt a CRM model that provides support for business processes that inevitably span numerous application areas. Applications that are underpinned by a unified data model represent elegant, focussed solutions to real problems as opposed to the best-of-breed ‘shotgun’ approach that, by its very nature, demands highly complex integration infrastructure and carries with it a high degree of functional redundancy and associated integration costs.

As the world is getting more complex, companies expect software vendors to make things simpler and to offer solutions that work and grow to suit the needs of their business. They do not want to be restricted by pre-determined functionality within packaged applications that don’t talk to each other. The key to effective customer strategies is to be able to identify a solution to a problem and then have the confidence that your business systems have the power and the flexibility to enable the implementation and integration of that solution. CRM is essentially about having the right solution, in the right place, at the right time.

Once the right CRM strategy is in place, it can offer tremendous opportunities to create deeper relationships and a real value-add for existing and new customers. As well as ensuring that the right information is delivered to customers in a clear format that is relevant and consistent with a company’s brand promise and personality, it also provides a powerful marketing tool that can be used to further enrich an organisation’s relationship with its customers.

In other words, the future of CRM lies within an integrated approach that provides the means to manage the entire customer lifecycle from beginning to end.

Colin Hudson is an expert in collaborative CRM for the enterprise software company, J.D. Edwards (www.jdedwards.com). He can be contacted at [email protected].

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