As customers, we are all becoming more demanding of excellent customer service. Whether we are dealing with a utility company, bank, insurance company, airline, or telecommunications service provider, our tolerance of poor service is falling, and our expectations of service excellence continue to rise. As many products are taking on something of a commodity status, and differentiation is at best short lived, excellence in customer service has become one of the few remaining differentiators in many markets. Within this environment, businesses of all shapes and sizes now recognise the value of Customer Relationship Management (CRM).
Recent trends in channel strategy - offering customers a choice in how they conduct business - have complicated the situation and in many cases created significant challenges in achieving excellence in CRM. This complication requires organisations to support multiple marketing, sales, service and delivery channels in an effective and consistent manner across multiple 'touch points' with the customer (24-hour call centre, retail outlet/branch, Internet/World Wide Web, third-party distributor etc).
It is well known that one bad customer experience in any channel can adversely affect the entire customer relationship and risk destroying loyalty. Poor service delivery can be the result of many things, but a common cause is the inability of the IT infrastructure to support a consistent customer experience across multiple channels and across the business functions of marketing, sales, service and delivery.
This is one of the findings from a recent research programme conducted by PA with senior executives in marketing and customer service. The survey looked at what barriers stood between organisations and their CRM objectives. IT was cited as a major barrier in two respects. First, the alignment of IT systems along functional lines, with the resultant absence of a 'single customer view'. Second, the absence of consistent, integrated customer information across the business units.
These fundamental inadequacies make it difficult to offer an excellent customer experience across all channels, and instead encourage disjointed service delivery. Consider the following examples, which are typical symptoms of this problem:
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The customer accesses product details on a Web site, but the history of that contact is not available to the call centre when the customer later contacts the organisation to make further enquiries or to make an unrelated service request
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The most recent customer details and contact history are not available when the customer walks into their local branch/retail outlet
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Call centre agents are not aware of which customers responded positively to the most recent marketing campaign
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A customer's change of address communicated to the call centre is not incorporated into the marketing department's next direct mailing campaign
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Within the call centre, the lack of quality customer information means that customers get varying levels of service according to which agent picks up the call, and requires the customer to repeat information to different people involved in the hand-off process for more complex enquiries.
The challenge for IT - revolution or evolution?
Given this challenge, many organisations recognise the need to re-orientate their IT systems towards the customer. However, most organisations cannot simply replace their existing systems. Even if the financial case for wholesale replacement of the legacy infrastructure was sound (a very rare situation indeed), the complexity of the task would mean that it could take years to complete. Organisations need to improve service levels now. They need to breathe life quickly into the legacy infrastructure so that improved customer experiences can be delivered on the front line as soon as possible, while at the same time meeting changing business needs (see Figure 1).
Figure 1: IT implications of changing customer service demands
PA believes that the customer expectation and the business need can be reconciled by:
These two areas are considered below.
The layered architecture - delivering a CRM infrastructure quickly
A layered architecture, as its name implies, distributes operational and customer management functionality across a number of logical - and physical - layers (see Figure 2). Physically, the layers can be implemented in a number of ways, using distributed computing, Intranet, gateway or data-warehousing technologies.
Figure 2: Customer service delivery pyramid
The right choice depends upon an organisation's existing system infrastructure, skill set and migration path.
Customer-facing users sit at the top of the pyramid, while existing core functionality and systems are at the bottom. The layers in-between protect the customer-facing users (and hence customers) from the real-world constraints of the existing systems, which hold the key data required. By separating users and back-office systems in this way, each logical layer can be used by the organisation to maximise advantage:
- The business data and systems layer - which represents an organisation's existing systems infrastructure - allows a business to maximise the potential of existing and planned investment in back-office infrastructure, including ERP
- The business process layer - ie the customer-facing users' new desktop application - helps rapidly improve levels of customer service across multiple channels
- The business logic layer - often described by the term 'middleware' - provides resilience to change, insulating the business process layer from changes in the business data layer, and vice versa.
The business data and systems layer
The business data and systems layer represents an organisation's existing systems. Over the years, millions of dollars and many years of effort will have been invested in an organisation's core systems. Separately, they may represent state-of-the-art systems. However, it is how they come together to serve customers that is important.
Figure 3 illustrates the disconnection between a company's perception of a customer and the customer's perception of the company. The customer view is straightforward.
Figure 3: Company/customer perception disconnect
The organisation's view comprises a wealth of historic data encompassing account numbers, bought services, discount schemes, payment record, mail shots, purchasing patterns and so on. Unfortunately, this extremely valuable information is likely to be distributed across multiple back-office systems, existing in functional silos.
Wholesale change to bring this information together (or starting from scratch) is not an option:
- The write-off implications may be unpalatable
- There are other business-critical activities that the organisation cannot afford to disrupt
- The time and cost involved, even through a gradual programme of replacement and enhancement, will be prohibitive and will not meet the short-term need for improvement in customer service. In the time it takes to complete, customers may well have departed to competitors
- There are many IT obstacles to implementing new systems - existing system complexity, data migration etc.
A layered architecture allows an organisation to build on top of existing systems and deliver relevant customer information to a single new customer service application. This maximises past investment by leaving the mainframes to do what they are best at (eg high-volume transactions of a batch nature) and allows a programme of back-office tactical enhancement to be carried out in parallel without disrupting day-to-day business.
The business process layer
The business process layer can be developed separately from the constraints of the back-office environment, though obviously all layers need to be in place for the end-to-end information flow to work.
The benefits of access to information via a business process layer rather than forcing users to access back-office systems directly are:
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Application delivery in months rather than years because of the distribution of development effort, potential for re-use of bits of functionality in back-office systems, the ability to extract the value in the information held in system data bases without having to change the core system functionality itself, and the fact that the development resource delivering the customer service application needs little knowledge of the back-office systems
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A single, easy-to-use customer-facing application can be developed - to all intents and purposes this will be a 'new' system which enables excellent customer service
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An application that can be tailored to the business process, or can be used to facilitate process change
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The customer's view rather than the organisation's view can be delivered to those in contact with the customer
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The customer service application can be available even when the back-office systems are down
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The new application can measure customer service levels and can even begin to build up new customer information based on each interaction. This repository of contact experience can provide valuable insights into individual customer requirements and even allow tailoring of the contact experience for some key customers.
The business logic layer
The successful customer service application is easy to use, fits nicely with the business process, and delivers uncluttered and complete customer information to users how and when they want it. The key is to bridge the physical and information gaps between the various back-office systems. The business logic layer works by converting service, account, operational and financial data (regardless of how it is formatted and in which system it resides) into information with which users can work.
Once customer service is being delivered across the layers, the business logic layer separates business process from data and therefore shields either layer from changes in the other. Customer-facing users do not have to know what back-office system to access for a particular customer, account, product or type of query. Therefore, a user can request information (eg payment or contact history) relating to a particular customer, without knowing the system or data base in which this information is stored.
Both the business logic layer (which comprises the data acquisition and conversion intelligence) and business process layer (which organises and delivers information to the user's desktop) are outside of the constraints of existing back-office systems. This displacement means that only the physical data retrieval mechanism locks the customer service application into the other systems. This retrieval mechanism can be readily adapted to point to other sources. Therefore, it is much easier to replace back-office systems without affecting the status quo in your customer service centres.
Such resilience and flexibility offer many advantages:
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Customer service training and production outage is minimised following major back-office system infrastructure work
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Segmentation of customers or packaging of services is easier because of the separation of data and function
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Alignment to ongoing business process change (which can be derived from the wealth of information the system provides) is made easier
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Through the separation of business transactions and the data that supports them, sub-system replacement or enhancement becomes easier and less risky.
Making informed choices about the business applications
When embarking on a programme to refresh the IT infrastructure to support CRM, there are crucial 'build/buy/integrate' decisions to make. There are many software products in the market that deliver application support to the customer front line and which can be deployed on layered architectures such as those described in this paper. Recently, the market has consolidated into three broad categories:
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Enterprise Relationship Management (ERM) products encompassing multiple elements of CRM, covering sales, marketing, service and delivery, eg Siebel, Vantive, Clarify
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Enterprise Resource Planning (ERP) products moving into the CRM space, eg SAP/K&V, Baan Front Office, Oracle; providing customer interface integration with key back-office systems
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Specialist products offering best-of-breed capability in one aspect of CRM, eg Remedy (fault management), Prime Response (campaign management) etc.
Essentially, there are three strategies to follow. One, buy an enterprise product (ERM/ERP) and integrate with back-office systems as required. Two, buy a number of best-of-breed products and integrate them along with the back-office systems. Three, build a bespoke customer-facing solution. Making the right choice will involve a trade-off between richness of functionality, integration risk and delivery timescale.
The answer will not be the same for all organisations and will be governed by their priorities and the current state of their CRM maturity. For example, implementing an enterprise product may seem at first to be the obvious choice. Such an approach should minimise integration risk, provide for consistency of customer data across multiple channels and can be implemented within a few months, depending on the business process complexity. However, no enterprise supplier can realistically claim to offer best-of-breed capability across all CRM aspects, and therefore compromises may have to be made on functionality in some areas in order to achieve rapid timescales and to minimise integration risk. Furthermore, such a solution, by definition, will touch most areas of the business in some way and the organisational impact of the change may be too much (at least initially) for organisations in the early stages of developing CRM capability.
Similarly, a bespoke approach may quickly deliver core capability to, for example, the call centre, but requires a high degree of integration to fully support a seamless interface across all customer channels. Alternatively, adopting a best-of-breed approach may support the business in differentiating itself in key areas (eg marketing automation) but again introduces a significant integration requirement.
The key to selection is consistency (of information, process and customer experience) and integration. One of the primary reasons for poor customer service is the predominance of 'point solutions', deployed to support particular elements of the CRM process.
Some organisations have selected best-of-breed applications, without thinking about integration across all customer contact points. Perhaps the most common example of this in recent years has been in the call centre. Although leading-edge systems support excellent service through that channel, they fail to integrate with systems supporting other customer-facing activities, where the customer then receives poor service.
Speed is of the essence
Choosing the right technology toolset for a comprehensive CRM solution is critical. However, the ability to improve customer service rapidly - particularly in the delivery of quality customer information to all points of contact - is key. If organisations fail in this regard and are therefore slow to improve their management of customer relationships, they may well find their prized assets have gone elsewhere.
A layered architecture offers rapid delivery capability. It can also provide organisations with the breathing space to re-vamp their back-office infrastructure over time to meet changing business needs, without affecting their ability to offer consistently high levels of service to customers in the short term. The layered architecture, effectively implemented, offers an elegant and speedy solution to excellence in CRM across all channels.
