Transcript CRM Scenario - Society for Information Management

CRM Scenario: Why the Future of
CRM Will Look Very Different Than
The Past
Scott Nelson
Notes accompany this presentation. Please select Notes Page view.
These materials can be reproduced only with Gartner's official approval. Such approvals may be requested via e-mail — [email protected].
CRM Predictions for 2007
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Large-scale, long-term CRM initiatives will begin to be approved
again in 2007.
There will be a rejuvenation of "build your own" CRM
applications in 2007.
The number of organizations with "single view of the customer"
projects will double in 2007.
Through 2008, vendors will transition to new service-oriented
architectures (SOAs), limiting R&D in new functionality and
hampering overall CRM application spending growth.
By 2008, 30 percent of new SFA production applications will be
deployed as a service.
During 2007, spending on open-source CRM will increase
threefold.
Through 2008, organizations will continue to fail to understand
the true value of feedback, throwing away most information
collected from customers.
CIOs Are Implementing IT Strategies Focused
on Growth, Alignment and Business Skills
2006 CIO Strategic Management Priorities
To what extent will each of the following CIO actions
be a priority for you in 2006?
Ranking
2006 2005 2004
Delivering projects that enable business growth
1
1
18
Linking business and IT strategies and plans
2
2
4
Building business skills in the IT organization
3
9
1
Demonstrating the business value of IT
4
3
2
Attracting, developing and retaining IT personnel
5
*
*
Applying metrics to the IT organization and IT services
6
4
14
Improving the quality of IT service delivery
7
7
3
Flexible technology infrastructure
8
*
*
Improving IT governance
9
10
11
Consolidating the IT organization and operations
10
8
**
* New question for 2006
** New question for 2005
What's Hot in 2006:
CRM Application Priorities
Sales
Customer Service
Marketing
Incentive compensation
Knowledge-enabled
service resolution
Enterprise feedback
Customer service
analytics
Mobile field service
Customer data mining
Marketing performance
measurement
Marketing resource
management
Customer advocacy
OpenSource SFA
VoIP contact center
B2C e-commerce
B2B e-commerce PRM
Case management
Inbound marketing
Proposal generation
Workforce optimization
Lead management
Order management
AppOnDemand CSS
Call center outsourcing,
offshore
Customer Interaction Hub
Lead management
B2B & partner marketing/
promotion management
Advertising management
Trade promotions
Speech recognition
Forecasting or pipeline
ACD, CTI and IVR
Affinity marketing
Campaign management/
e-mail marketing
Privacy management
Sales configuration
Web chat, ERMS
Web personalization
AppOnDemand SFA
Sales analytics
Mobile and wireless
Price management
Customer Data Integration
Business Process Mgmt.
Industry-specific SOA
CRM Applications Remain Fragmented:
More Than 50 Submarkets
Segmentation/Event Triggers
MRM
eMarketing
Field Marketing
Field Sales
Marketing
Sales
Promotions Mgt.
Location-Based
Order Management
Configuration
Business Intelligence
Performance Mgt.
Personal Productivity
Customer Value Analysis
Interactive Data Mining
Social Networking
Pricing
Analytics
In Line, Event-Driven
Dashboards/KPIs
RFID/Telematics
Warranty Mgt.
Parts Planning
Wireless Mobility
Contracts
Product Life Cycle
eCommerce
Inside Sales
Partner Management
CRM
Application
Value Chain
Self Service
Analyzing
Finding
Knowledge Management
Customer
Service
eLearning
Communicating
Forming
WFO
Field Service
Rewarding
Norming
Performing
Trouble Ticketing/Case Mgt
Managing
Monitoring
Fraud Detection
Product Information Mgt
RFID
Inventory
Logistics
E-Commerce
Information &
Infrastructure
Customer Data Integration
Information Mgt.
BPM
App. Architecture
Application
Infrastructure
As the World Gets Smaller,
Customer-Centric Strategies Get Larger ...
Mobile Devices
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Ubiquitous
computing
Devices for life
Portable
computing power
Communications
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Security
Convergence of
communication
Broadband, WiFi
and WiMAX
Always accessible
or online
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Biometrics
Profiling
or access
Convergence of Corporate
Systems and Data
Collaborative
Platforms
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Outside
four walls
Extend out
to customer,
back to
suppliers
Localized
Technology
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Tagging
 Proximity
monitoring
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Real-time data
Unified view of the customer
Complete transaction history
Noncorporate data (satisfaction)
Traditional Business Components of CRM
More-Effective Customer Interactions
Customer-Satisfying Behaviors
Greater Customer Access
e-ERP
E-Business
Integration Among
"Front-Office" Functions
Business
Organized
Around
Customer
Field Sales
Retail Sales
Tele-marketing
e-CRM
Customer-Centric Processes
Tele-sales
Partner Relationship Management
Supplier
Finance
Extended
Distribution CRM Enterprise
& Logistics
Integration With
Back-Office Functions
Acronym Key
CRM = customer relationship management
ERP = enterprise resource planning
SCM = supply chain management
R&D
Customer Service
Field Service
Human
Database
Marketing Resources
Customer Insight
Manufacturing
and Understanding
Marketing
Info. Systems
Areas Covered within CRM
The Reality of Customer-Centric Strategies
More-Effective Customer Interactions
Customer-Satisfying Behaviors
Greater Customer Access
e-ERP
E-Business
Integration Among
"Front-Office" Functions
Business
Organized
Around
Customer
Field Sales
Retail Sales
Tele-marketing
e-CRM
Customer-Centric Processes
Tele-sales
Partner Relationship Management
Supplier
Finance
Extended
Distribution CRM Enterprise
& Logistics
Integration With
Back-Office Functions
Acronym Key
CRM = customer relationship management
ERP = enterprise resource planning
SCM = supply chain management
R&D
Customer Service
Field Service
Human
Database
Marketing Resources
Customer Insight
Manufacturing
and Understanding
Marketing
Info. Systems
Areas Covered within CRM
Guiding Principles for Successful
Customer-Centric Strategies
Use and enhance
brand equity
Extend breadth
and depth of
relationships
Company
"Touchpoints"
value network
Minimize transaction barriers and
reduce costs
e-CRM
Self-service
Focus on customer value and
satisfaction
The Eight Building Blocks of
Customer-Centricity
1. Customer Vision
2. Customer-Centric Strategy
3. Valued
Customer
Experience
4. Organizational
Collaboration
5. Customer Processes
6. Customer Information
7. Technology, Including CRM
8. Metrics
Customer-Centric Generational Framework
First
Second
Third
Fourth
Fifth
Vision
None
Initial
productivity
and visibility
Function or
channel
effectiveness
Intracompany
integration
Value network
enabled
Strategy
None
Company-level
CRM program
Value-based
collaboration for
mutual benefit
Unknown
Customer
concept;
Experience designs itself
focus;
Organizational Inward
silo
Collaboration
structures
Inward focus;
Processes silo-oriented
Isolated projects; More "joined up"
initiated from the thinking, but still
bottom up
silo-oriented.
Unknown
concept;
designs itself
Understanding
and focus at
silo level
Understanding Understanding
& focus across of wider scope;
lines of business collaboration
First signs of Changing culture Customer-centric;Shared customercustomer
and incentives;
reorganized by
centricity;
centricity; silos
silos
segment
goal alignment
Start optimizing Optimization at Company-level
for efficiency; silo level for cost optimization for
Silo-oriented
& value reasons cost and value
Team-based;
fragmented;
Information
minimal insight
Very
Fragmented;
fragmented;
limited
Technology
Weak
functionality
functionality
and focus
Few metrics; Fragmented and
Metrics inward focus limited metrics;
operational focus
Basic and
fragmented
Most organizations today:
Shared info at
silo level; insight
developing
End-to-end
process
optimization
Shared info &
Shared info &
insight across
insight beyond
the company
the company
Strong
Strong
Strong
functionality
functionality;
functionality
with
companyintegrated
beyond
within silos
level integration
the company
Focus on silo
Company- and Shared objectives
efficiency; lacks customer-focused and balanced
customer focus balanced hierarchy metrics; aligned
The Components of the Customer-Centric
Maturity Model
Business Practices
Maturity Levels
Align Marketing Strategy with
Customer Value and Expectations —
Do your strategies capitalize on your
customer-centric capabilities?
Manage Customer Information as a
Strategic Asset — Your ability to capture
and leverage this information is critical to
making it a competitive advantage.
Identify Customer Expectations —
Are you consistently meeting or
exceeding customer expectations?
Measure Customer Ongoing Value —
Do you know who your most valuable
customers are?
Integrate Across Business Units —
How well do you maximize your efforts
and competitive advantages across
functions and business units?
Manage the Customer Experience —
How do you coordinate and manage
product and service delivery?
Leading — An organization that
has differentiated itself based on
customer-centric capabilities,
and simultaneously redefined
those capabilities.
Optimizing — An organization
that has not only developed
customer-centric capabilities but
also actively integrates them into
its daily operations.
Practicing — An organization
that has implemented basic
customer-centric capabilities.
Developing — An organization
that has a rudimentary, looselywoven set of customer-centric
capabilities in place.
Aware — An organization that
exhibits few customer-centric
capabilities.
Processes —
Avoid Accelerating Established Processes
Present
2008
CRM Applications
CRM Applications
Prospect to
cash without a
process focus
1. Log activity
2. Log opportunity
EAI
EAI
3. Check contract
4. Check inventory
5. Check ATP/CTP
15. Invoice
2. Log opportunity
14. Ship
Financials,
inventory
management
and order
management
6. Determine price
7. Quote customer
16. Apply payment
Prospect to
cash with a
process focus
1. Log activity
EAI
8. Create quote
3. Check for contract
CRM
16. Apply payment
Functionality
15. Invoice
14. Ship
13. Send ASN
ERP
Functionality
13. Send ASN
4. Check inventory
12. Plan & produce
5. Check ATP/CTP
12. Plan & produce
11. Confirm order
6. Determine price
11. Confirm order
10. Check credit
7. Quote customer
9. Generate order
8. Create quote
SCM
10. Check credit
Functionality
9. Generate order
EAI
SCM Applications
Acronym Key
ASN advanced shipment notice
ATP available to promise
CTP capable to promise
EAI enterprise application integration
SCM Applications
ERP enterprise resource planning
SCM supply chain management
Process-Oriented Applications
Marketing
Customer
Service
Sales
Order
Management
CSS
Customer
Inquiry
CMS
MRM
BI
Proposal
Order/Sales
POS
SFA
Payment
SCM
Billing
Invoice/Bill
Partner/
3rd Parties
Quote/Offer
Payment
Opportunity
Enterprise
Proposal
Generation
Negotiate
OMS
Lead
Order/Sales
Order
Entry
Contracts
Invoice/Bill
Lead Management
Analytics
Personalization
Self
Service
CDI
Infrastructure/
Platform
Billing
Eventual Goal:
The Intent-Driven Organization
Function-Driven
Organization
Goal: Suboptimization
Data Mining
Campaign
Management
Event Triggers
Real-Time
Customer Insight
Sales Management
E-Commerce
Contact Center
Self Service
Field Service
Internal
Development
Management
Intent-Driven
Organization
Synchronizing
connected functions
Predictive
Marketing
Right-Time
Marketing
SegmentationBased Selling
Guided
Interactions
Proactive
Service
Automated
Enterprise
Channels
Self-Sustaining
Devices
"Ecosystem" optimized
Differentiated
or Personalized
Relationship
Service as the
Value of the
Product
Intelligent,
Automated
Relationships
Changing Spending on Customer-Centric
Application Architecture Types
80%
Development
70%
Relative Importance
70%
60%
Integration
50%
50%
40%
25%/25%
30%
20%
20%
10%
0%
Early Generations
10%
Functionality
Late Generations
Consumer Power Will Increase:
Communities, Mash-ups and Social Networks
craigslist
Mashups
CRM Consultancy and Systems Integration
2006 Mini-Boom
Indicators for the mini-boom:
– CRM consulting and systems integrators (SIs) are reporting being "sold
out" in specific disciplines.
– Indian pure-play SIs are growing by up to 60% in CRM practices.
– Utilization rates are averaging mid-70 percent and close to 80%.
– Billing rates are rising, especially for CRM consulting work & analytics.
– Freelance CRM consultants are on the rise.
– Recruitment has returned to universities and graduate schools.
Advice to buyers of CRM consulting and systems
integration services:
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Expect more resource shuffling as people with key skills multitask.
Spend more time vetting resources on CRM projects.
Take on more work internally without using external consultants.
Re-evaluate the blend of offshore and onshore resources.
Consider using the software vendor's skills.
Consider longer-term contracts and rate cards to protect rates.
Recommendations
 Growth: CEOs and CIOs are focused on organic growth, but justifying funds
remains hard. Continue to justify CRM with cost savings, but prepare to show
how CRM aids growth.
 Consolidation and Innovation: More than 35 CRM application vendors
merged in the past 18 months. Weigh viability more heavily in purchase
selection criteria in 2006/2007.
 CRM Service Providers: There is a shortage of CRM skills, so utilization
rates and fees are rising. Anticipate that consulting fees will rise and act now
to protect yourself.
 Pain Points: Metrics, process mapping and employee turn-over cause the
most pain. Focus on user adoption and benefits to front-line staff, not
management needs, to gain a higher ROI.
 What's Hot: Lesser-known areas of CRM technology often deliver the
greatest benefits. Invest in MRM, ICM, self-service and customer analytics
ahead of sales force automation, call centers and campaign management.
 The Future: Consumer power will continue to increase. Social networks,
communities and privacy management will rise to the fore as key CRM
competencies. Investigate now.
CRM Scenario: Why the Future of
CRM Will Look Very Different Than
The Past
Scott Nelson
Notes accompany this presentation. Please select Notes Page view.
These materials can be reproduced only with Gartner's official approval. Such approvals may be requested via e-mail — [email protected].
CRM Scenario: Why the Future of
CRM Will Look Very Different Than
The Past
Scott Nelson
Notes accompany this presentation. Please select Notes Page view.
These materials can be reproduced only with Gartner's official approval. Such approvals may be requested via e-mail — [email protected].