PracticePeople In PracticeCRM relationship therapy

CRM relationship therapy

Is CRM technology really having a major impact on the way in which customers are managed? We bring together an analyst, a consultant, a vendor and a customer to fight it out. Then we go onsite to see how harmony can be achieved

The analyst: Ovum

Ovum defines Customer Relationship Management as “a management approach that enables organisations to identify, attract and increase retention of profitable customers, by managing relationships with them”. The technological implications of this are that CRM software can encompass elements of front office functions such as marketing and customer service, back office functions such as order processing, and business intelligence software for analysing customer data effectively.

Ovum estimates that the CRM marketplace was worth around £4.1bn in worldwide software revenues in 1999 and although it has no formal forecast of future growth, the CRM market shows potential for huge expansion over the next five years.

Software vendors have certainly piled into the space. An Ovum September 1999 white paper, CRM Strategies: Technology Choices for the Customer-Focused Business, described the CRM software market as “a large conglomeration, which is heading for maturity”, and forecast consolidation among vendors over the next few years.

The paper’s author, Cassandra Millhouse, lead CRM analyst at Ovum, has been justified by events, given PeopleSoft’s acquisition of Vantiv and Nortel’s purchase of Clarify. “Consolidation is already starting,” she says.

Millhouse also notes that CRM software suppliers are keen to identify themselves with the e-phenomenon. “Siebel, for example, which has always led the pack in CRM, has reclassified itself as a seller of e-business software,” she says. “Oracle, as of its next release, won’t be talking about its ERP software, its CRM software and its e-commerce offering, but will be talking about its e-business suite.

“All the CRM vendors are [aligning themselves with e-commerce], whether they are doing it by recategorising themselves or doing new things with their product range. They are moving towards the concept of aligning their relationships in an e-business environment. People also understand that e-business is not just the web, but a combination of clicks and mortar. So while the web is the channel everyone is worrying about, because setting up the infrastructure for that is new, at the same time it is understood to be just one of the channels that you need to manage with your customer. And it’s not just being able to do that at the front office, which is where the CRM vendors originally come in, but also being able to do that in the back office.”

Millhouse goes so far as to predict that only those CRM companies that can successfully recategorise themselves and evolve into e-business vendors will survive. “The best chance for survival for those who don’t is as a vendor of niche solutions,” she says.

As for consultancies, the CRM market looks enticing. “The market is really ripe for integrators and consultancies at the moment,”says Millhouse. “There was a lot of hype in the last couple of years that people should get into CRM. But companies are now at the stage where they are doing it, or thinking about doing it, and they want to go forward with consultants’ services. And there are a lot of services associated with CRM. It’s not just about technology, not just about automating your sales force, but about changing your processes as well. So CRM is a good market for service providers who specialise in that.”

The consultant: Softlab

Recent research commissioned by Softlab, the IT consultancy and BMW subsidiary, shows the current high degree of fragmentation in the UK CRM consulting market. The research, based on interviews with 120 companies across a range of industry sectors, found that half of the respondents were making use of CRM consultants but that no particular consultancy firms had yet emerged to dominate the field.

“With CRM, what it takes to invest and get up to speed with the range of software and technology means that smaller players get frozen out,” says John Head, CRM consulting practice director at Softlab. “Larger players like PricewaterhouseCoopers or firms such as ourselves, who come from a financially strong background, will have the opportunity to drive the market.”

Head also notes the different consulting approaches co-existing in the market. “Some come at CRM from a process improvement model,” he says. “In contrast, we come at it from an integration model, building that back into a consulting process which is dedicated around CRM. The jury will be out for three or four years as to which is the one clients really take to.”

Head notes that the majority of current CRM consulting activity is focused on the larger corporates, but he foresees strong demand in the pipeline from smaller, and medium-sized clients, creating new opportunities for consultants. “At the moment everything is done very much on a bespoke basis,” says Head. “However, we are looking at one particular industry sector where we can come up with a relatively standardised template which can be applied to anybody in that sector. I believe consultants with vertical industry knowledge can put together a more standardised CRM offering which can then be taken to their clients at relatively lower cost. It’s part of the industrialising of consultancy and I think it’s where significant opportunities will lie.”

As for the current nature of the consulting process in CRM, Head says consultants would like to be involved earlier in any CRM implementation. “We quite often find that clients are keen to demonstrate to their bosses that they know everything and they come up with a solution they want to implement but which in hindsight was ill-founded,” he says. “We know the range of offerings and we will look at clients’ situations and come up with what we think are best in class solutions. If we are involved early we can also talk to them about the financial business benefits they will get. Many CRM implementations can’t prove they have made any money for anybody. So we say, fix your sights on some objectives, and we can help work out how to take your organisation there.”

Finally, Head stresses the increasing need for speedy implementations. “If you take a long-term view of something and take a long time implementing it, you have lost,” he says. “The long term is made up of successful short terms. The trick is to find something you want to do and just get it up and running. The Americans are good at this. We tend to look at them and think how they could have made a much more elegant job of it. But the fact is they make millions of bucks.”

The vendor: Oracle

“From a vendor perspective we see CRM as a market showing incredible growth right now,” says Robert Fleming, Oracle’s director of CRM and e-commerce marketing and business development, EMEA.

“We see companies that are looking for a total CRM strategy, that are looking to become more customer-focused. Other companies are looking at a particular area of the technology, for example, improving call centre effectiveness or the effectiveness of the sales force.”

Fleming says companies are also putting pressure on vendors to supply really effective offerings involving the web as a channel to the customer. “I don’t just mean selling through a web stall, though that is important,” he explains. “This involves things like web-based customer support as well. A lot of the companies we are seeing are looking to the web as a way to alleviate pressure on call centres and reduce call centre costs. For example, there is a lot that can be done with the technology to allow customers to do things for themselves, to log a service request through a web site. That’s an area we are being prompted to focus on.”

Fleming stresses that while current CRM technology can be used to automate services or make them more effective, as with sales force automation, it can do much more. “Almost more important than that is the integration between customer interaction channels-call centre, field, web, mobile, retail store,” he says. “That seems to be the key thing-to provide a consistent level of service across these channels. A year and a half or so ago the market was very focused on point solutions like sales automation, for example. Now people are looking more broadly at the long-term view of how the different elements will all work together. This is one of the big challenges going forward that we see. A lot of companies have very separate strategies for their web channels compared to the rest of their traditional customer channels. Marrying the on-line and off-line world is one of the important issues for many businesses. It creates a sizeable opportunity both for consultants and for vendors like ourselves.”

Fleming also sees the use of the Internet as a technology platform, enabling staff to access centrally held data via a browser, as a key enabler of effective CRM applications. Not only does the web-based approach improve data access, it can also prove highly efficient, he believes, resulting in greater ease of use and lower total cost of ownership of CRM solutions.

Fleming stresses that the future success of CRM products won’t just be determined by the technology, but by the way that technology is used to fully understand customer needs and build strong relationships. “The other issue we are seeing clearly is that CRM is about more than tools and processes,” he says.

“It’s about really understanding the customer, which means mining information about them at all the different customer touch points, capturing that information, analysing it and refining the offer to the customer. It’s about equipping employees with the data on customers so that they can have more effective interaction with them.”

The customer: Scottish Widows

Scottish Widows has implemented Unitrac, a CRM solution from Cyborg CDS, to provide up-to-the-minute centralised sales information across its entire organisation.

Al Young, senior projects manager at Scottish Widows, is also secretary of the Unitrac European Users Group and has seen CRM applications being implemented in numerous ways across a range of industries including financial services, telecoms and manufacturing.

While CRM applications already enable mobile sales forces to obtain regular customer-data updates from central databases, Young believes another revolution will be starting in the next 12 months due to the implementation of web-based solutions. Rather than branch or mobile sales personnel holding sub-sets of information on their own PCs, in future they will have browser access via the Internet to the centrally held “bucket” of data. “The benefit is that they suddenly become real-time users of that data, rather than simply depending on data which was accurate the last time they synchronised [their PC-held data with the central database],” says Young. “Neither do they have to have the CRM application installed on their PC or laptop. They are simply using browser technology to access, via some secure link, the company’s central database. The advantage, if you are only using browser technology, is that the tools available to you to gain that access become more generic. You could theoretically access the data from any Internet-enabled PC.”

However, the development of WAP (wireless application protocol) and GPRS (general packet radio service) technology means that the potential to access data while on the move will increase even further.

“The big change coming with CRM will be for the people on the road seeing customers,” says Young. “They will be able to walk into any business premises and call up the current snapshot of data needed for any client, via WAP technology or GPRS. If the client asks for some information on their organisation they can simply call up data accurate to within the last minute on a handheld device-that’s marvellous. This is where I see the biggest developments in CRM taking place.”

The realisation of this vision will depend on more than technological capability, however. Changing culture and working practices to adapt to the new technology can be one of the harder parts of any CRM implementation. “One of the biggest issues to address is culture change, of selling the benefits of the new way of working to the users of the system,” says Young. For example, persuading an experienced sales representative to put aside his trusty filofax and input all his knowledge into the central database may take some doing. While the salesman himself benefits from the access to detailed and accurate data, he may feel threatened by giving up so much of his own hard-won knowledge. “To have a good CRM system you need accurate, regularly updated data and for that you need people to be keying-in what’s happening,” says Young. “It may sometimes take a bit of a culture change to achieve that.”

Case study: Going Places

UK travel agency Going Places set itself the goal of increasing its conversion rate of customer enquiries to sales and realised that its electronic booking procedures needed updating. Around 95 percent of the average customer booking time was taken up by staff searching for reservations, with each booking typically requiring 50 queries to be entered on a range of aspects such as flights and hotels. “We had to streamline the way our staff used technology,” says Jill Martin, Going Places’ sales and operations director. “We had to turn lookers into bookers. If our staff couldn’t find the right holiday for the customer on their first visit, another holiday firm might.”

Going Places turned to travel industry IT specialist Rapid Travel Solutions, which had developed an application called Travel Trader, a user-friendly interface for all the information sources commonly accessed by the travel industry. However, Going Places wanted additional functionality and requested the development of its own system, to be called Matchmaker.

After considering various architecture options, Going Places chose Microsoft Windows NT and called in DAT Enterprises to design and install the NT specifications on all workstations and servers. Timing was tight as the new system needed to be rolled out across 700 shops in 14 weeks in order to be ready for the January 1999 peak sales period. DAT used Microsoft’s Systems Management Server to ensure it met the deadline. “Through use of the integrated inventory, distribution, and diagnostic services, we found that electronic distribution of Matchmaker using SMS was as accurate as manual installation,” says Phil Greenhalgh, project manager for DAT.

The new system achieved the desired benefits. Conversion rates of enquiries to bookings have risen and the average customer transaction time has been cut by over 15 minutes. Going Places attributes the improvement to several factors, including the rapid search facility and the fact that customer details now only have to be entered once, so eliminating much rekeying. The system also now gives standardised prompts to advisers. “It’s not robotic, but it provides hints to new staff and allows us to provide a consistent service,” says Martin.

Case study: Swiss Life

In February leading insurance company Swiss Life (UK) announced that it would be rolling out the CRM solution Onyx Front Office across three of its major business units. They are: Employee Benefits, which provides life assurance and other insurance-based products to companies for the benefit of their employees; Investment Management; and Personal Finance.

Onyx Software Corporation focuses on providing customer centric e-business solutions. Its CRM offering is designed to allow all customer- facing staff, including those in sales, customer service and marketing, to manage common customers and prospects between different departments. By implementing the CRM solution Swiss Life aims to streamline customer relationship efficiency and create a more customer-focused organisation. The Onyx system also includes web interfaces for service requests and enquiries as well as interfaces with existing legacy systems.

Applications service provider Interliant Consulting will roll out the solution to more than 500 of Swiss Life’s customer-facing employees, with the first phase of the solution being deployed in the Employee Benefits department.

“Onyx Front Office is the ideal CRM solution for Swiss Life, “says Dave Yuile, a director at Interliant Consulting. “It is unique in offering a complete CRM solution based on a configurable application that is designed to meet the needs of individual industries. “

Adam Heslop, corporate project manager at Swiss Life, has high hopes for the Onyx solution.

“Onyx Front Office will be a core component in ensuring the success of Swiss Life’s strategic shift towards an even greater efficiency in customer intelligence and contact management,” says Heslop.

“We chose Interliant and Onyx because of their reputation for delivering quality CRM solutions on time, within budget and to the required specification. Both companies have a superb track record in deploying CRM provisions to the financial services sector and we are confident that out objectives will be met.”

Swiss Life is also considering deploying Onyx Channel Connect, channel management software that enables companies to share business opportunities with their partners over the web.

The insurance group is also reviewing Onyx EnCyc, a marketing encyclopaedia that allows customer-facing staff access to up-to-date marketing materials either via the web or on CD for customer marketing projects.

Case study: Newcastle City

CouncilEnvirocall, a customer response centre within Newcastle City Council’s environment department, handles queries from the city’s 280,000 residents. Calls focus on environmental issues such as rubbish bins, skips, highway construction, street furniture, pest control, trees, traffic problems and toxic waste.

In 1998, the call centre came under scrutiny. The range of issues and the numerous technical aspects had created a complicated role for the customer service agents when handling calls.

“We had no way of cross-referencing the experiences of other agents, technical experts or previous cases,” says John Lee, Newcastle project officer for “best value”, the government initiative requiring councils to secure the best value for taxpayers. “Agents were repeatedly recreating case histories and duplicating work.”

Residents were frustrated by response times measured in weeks and often had to make several calls to check on progress, repeating the same information each time. “The cost of agent training, expert consultants and the time spent on each case was devouring our budget and residents were dissatisfied with the level of service they were receiving,” says Lee.

In December 1998 the council purchased k-Commerce Web from Inference for its 12-seat call centre. The council decided that the solution, part of k-Commerce Support’s fully integrated suite of customer service solutions, could immediately improve the call centre service and be flexible enough for longer-term service development.

Inference helped the council to integrate k-Commerce Web with the data collection tool, GIS (Graphical Information System). It also assisted in building the k-Commerce Knowledge Base to facilitate the sharing of information, including technical data and past case resolutions, throughout the organisation. The Knowledge Base was initially developed with a focus on two areas, highways and street lighting, and call centre agents were given access to the Knowledge Base through the council’s Intranet.

The new, improved call centre was ready to operate by 1 April 1999 and the council has been pleased with the results. The Inference solution has improved customer satisfaction, empowered staff, shortened training times, provided faster responses to callers and increased resolutions per agent. It has also reduced call escalation rates and improved follow-ups. “k-Commerce Support raised the quality of our customer service significantly,” says Lee.

Case study: Threadneedle Investment Services

As part of the Zurich Financial Services Group, Threadneedle Investment Services has grown in five years from a start-up operation to become the fifth largest fund management company in the UK.

When operations began to expand throughout Europe and the UK, Threadneedle realised it needed to streamline its operational, marketing and sales processes while maintaining and enhancing its customer service. “We needed to improve the speed with which we captured and processed deals and fulfilled requests for information,” says systems architect Dave Carter.

The fund manager decided it needed a new CRM solution and in June 1999 chose Siebel Systems for its feature-rich, flexible offering. Threadneedle is implementing Siebel Sales Enterprise and Siebel Call Centre at its Swindon-based retail division and will also implement Siebel Assignment Manager and FileNET to automate workflow and utilise document imaging to streamline both processing and client administration. Ultimately all 150 call centre agents will have access to the solution.

Siebel’s business partner, Cambridge Technology Partners, was contracted to perform the systems integration and customisation of the core solution to support Threadneedle’s specific business processes. The Siebel applications were integrated onto Threadneedle’s resident IBM AS400 system and strategic Windows NT platform. The solution will also integrate with the call centre’s Aspect Communications Corporation’s automatic call distribution system. On full deployment, Siebel Systems will integrate with Threadneedle’s IBM 3090 mainframe server using IBM MQ Series middleware.

“With this solution, we will be able to integrate our transaction processing activity with customer servicing and incorporate the rapid business growth we are experiencing without deploying additional staff resources,” says Carter. The solution provides all the information a Threadneedle agent needs to handle any customer valuations and fund portfolio enquiries quickly and efficiently from within a single solution.

Threadneedle is now evaluating how it can deploy Siebel e-business applications. “Our CRM and e-commerce objectives sit together as integral components in our overall strategy to make it easy for all customers to do business with us,” says Carter. “When we chose Siebel Sales Enterprise, we were looking to deploy a technology platform that had the functionality and flexibility to turn these concepts into a successful business reality.”

Sarah Perrin is a freelance journalist

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