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IBM 2012 North American CRM Solutions Customer Value Enhancement Award

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  • 1. BEST PRACTICES RESEARCHCustomer Value Enhancement AwardCRM SolutionsNorth America, 2012Frost & Sullivan’s Global Research PlatformFrost & Sullivan is in its 50th year in business with a global research organization of 1,800analysts and consultants who monitor more than 300 industries and 250,000 companies.The company’s research philosophy originates with the CEO’s 360-Degree Perspective™,which serves as the foundation of its TEAM Research™ methodology. This unique approachenables us to determine how best-in-class companies worldwide manage growth,innovation and leadership. Based on the findings of this Best Practices research, Frost &Sullivan is very pleased to present the 2012 North American Customer ValueEnhancement Award in CRM Solutions to IBM.Significance of the Customer Value Enhancement AwardKey Industry Challenges Addressed by Enhancing Customer ValueAttracting and profitably retaining customers is a challenge for all companies. Theeconomic downturn has decreased consumers’ spending ability amid inflation and jobinsecurity. The global economy is in a slow or no-growth mode. The InternationalMonetary Fund’s (IMF) World Economic Outlook predicts a lower than three percent rise inU.S. output through 2012. The European, Japanese and Canadian economies will alsoexperience sluggish growth. The IMF warns of inflation risks and increased financialvolatility in this environment.Consequently, business managers have to find creative ways to retain and grow biggerwallet share from current clients and/or target those doing business with competitors.There also exists the choice to expand into emerging markets.In this environment, customers are golden, and they know it. They have become moredemanding, seeking personalized service with discount pricing. CRM customers report toFrost & Sullivan that they are leveraging the Web, especially social media, to becomemore informed buyers. A recent study by Knowledge Networks – Center for MediaResearch (CMR) noted that 12 percent of the U.S. population, or 37 million consumers,refer to social media before making a purchase.The number of wireless subscribers now exceeds that of the U.S, population, according tothe CTIA. The U.S. National Health Interview Survey reports that more than one in fourAmerican homes are now wireless-only. There are strong and growing synergies betweensocial media and mobile communications, putting considerable strain on traditional CRMplatforms. The CMR study reported that roughly 80 million people check social media froma mobile device. Empowered by this information and access, customers expect a business© 2012 Frost & Sullivan 1 “We Accelerate Growth”
  • 2. BEST PRACTICES RESEARCHengagement experience that matches the ease and speed of simple on-line searches. Thequality of those interactions will shape their loyalty and future purchases.In order to meet these consumer demands, companies must have complete and up-to-date knowledge of individual customers: their demographics, issues, transactions andnetworks. They need to gather data from a variety of sources that must be integrated,sorted, scrubbed, updated, and normalized in data warehouses.Frost & Sullivan notes that one of the key challenges facing firms is making sense ofunstructured data. This includes voice call recordings, chat sessions and social mediacommentary. This information contains vital insights on customer issues, their views aboutproducts and services, and potential opportunities.Companies must then perform analysis on that data in real-time so that agents canprovide targeted offers. This analysis can update agent and automated chat, email andSMS/text and voice scripts on-the-fly. Best of breed solutions provide an option tocollaborate with customers, enhancing both service quality and agent productivity.Moreover, these CRM applications may be able to support best-of-breed data integration,data warehousing, business intelligence, predictive analytics and collaboration tools.Firms also increasingly need to integrate other vital processes - along with CRM solutions -in order to deliver high-quality and more productive service. These include billing, claims,enterprise resource planning (ERP), fulfillment/shipping and supply chain management(SCM).The proper enabling CRM solutions can obviously be a daunting task for midmarket firms.Companies of this size typically have small IT departments. They are understandablycautious about adopting new technology. New solutions must have direct cost-savingcomponent, reducing total cost of ownership and delivering rapid ROI. These marketparticipants can ill-afford system downtime that can cripple their service, sales andsupport programs. This could lead to frustrated sales and service teams and dissatisfiedbuyers.Midsized companies can be receptive to CRM solutions that are multichannel, device-agnostic, modular and open. These solutions, however, must integrate seamlessly withdata, analytics and collaboration tools.© 2012 Frost & Sullivan 2 “We Accelerate Growth”
  • 3. BEST PRACTICES RESEARCHBest Practice Award Analysis for IBMThe Frost & Sullivan Customer Value Enhancement Award is presented each year to thecompany that has demonstrated excellence in implementing strategies that proactivelycreate value for its customers with a focus on improving the return on the investment thatcustomers make in its services or products. This Award recognizes the companysinordinate focus on enhancing the value that its customers receive, beyond simply goodcustomer service, leading to improved customer retention and ultimately customer baseexpansion.IBM in the CRM MarketIBM has long had a superior presence in the CRM market, helping hundreds of the world’sleading brands solve their complex CRM challenges in the contact center, online, in-person,and across emerging devices and social networks. Whether measured by the breadth andprestige of their client base, growth and revenue in CRM markets, analyst rankings, orthought leadership, IBM consistently ranks as a global leader in the CRM market.IBM’s portfolio of client services includes:  Comprehensive CRM strategy consulting services that include business vision development and planning; CRM operations consolidation strategies; goals diagnostics, gap analyses and other planning analyses; self-service and telephony integration assessments; and social media / multi-channel customer strategies.  CRM Business Analytics and Optimization services that deliver customer analytics, profiling/targeting analysis, data warehousing, ‘big data’ capabilities for customer analysis, contextual analytics/social media analytics, and CRM master data management.  Advanced Customer Research focusing on First of a Kind (FOAK) CRM capability development utilizing IBM’s R&D and scientific research divisions.  CRM Application Innovation services for developing custom customer-facing applications, including solutions for CRM mobility, web applications, and contains the fifth largest web interactive firm in the world: IBM Interactive.  CRM Enterprise Applications and Application Management services that configure, deploy, customize, and manage industry leading CRM package applications (e.g., SAP, Oracle/Seibel).  CRM Global Process Services (CRM Business Process Outsourcing) for multi- channel contact solutions, enabling thousands of skilled CRM agents to fulfill client interactions on behalf of many of IBM’s premier clients, provided through global delivery centers and focused on process optimization and deep leverage of customer analytics.© 2012 Frost & Sullivan 3 “We Accelerate Growth”
  • 4. BEST PRACTICES RESEARCH  Leading CRM and Customer Analytics Software solutions such as Cognos, SPSS, LotusLive, InfoSphere, RedPill, Unica, Netezza, Clarity Systems, Algorithmics and many others.  Direct and in-direct consumer research based on global surveys of consumers and the companies that serve them to generate valuable market insights into the behaviors and mindsets of today’s customers.Key Performance Drivers for IBMFactor 1: Connecting the ApplicationsTruly effective CRM requires literally stepping out of the box to enhance the customerexperience; these applications are, in most cases, not “plug-and-play”. CRM solutionsrequire many different methods, processes and tools to deliver on their potential andpromise.Frost & Sullivan independent analysis confirms that IBM has identified the steps that areneeded to make CRM software attractive and affordable for mid-size firms. It has evaluatedthe CRM offerings from leading suppliers for their features, functionality, strengths andweaknesses.From this analysis, IBM has assembled and sells an integrated array of CRM-enablingsolutions. These include application/data integration (WebSphere Cast Iron), businessintelligence and predictive analytics (Cognos, SPSS) and collaboration (LotusLive) products.IBM can also provide CRM solutions to midmarket companies supporting data warehousing(InfoSphere), and ERP and SCM software. The IBM CRM portfolio provides BPO and contactcenter optimization services to enhance the customer experience, while also improving bothperformance and productivity.Factor 2: PartnershipsFrost & Sullivan is of the opinion that IBM has wisely chosen not to offer a midmarket CRMapplication with traditional sales force and marketing automation, contact management andcustomer service/support modules. Instead, the company is offering its products andservices as enhancements, which it calls a “smarter approach to CRM”. IBM has chosen topartner and integrate with Microsoft Dynamics, Netsuite, Oracle, SAP, and SugarCRMThese solutions possess the core functionality and features that mid-size companies arelooking for. With IBM’s strategy, midmarket firms that have already invested in thesesuppliers’ CRM solutions can select and install IBM products and services as needed with theassurance that they will work seamlessly together. These tools also make a difference inwhich CRM software a company selects through IBM’s brand name and reputation. IBM hasclearly gained a foothold in the mid-size market segment.© 2012 Frost & Sullivan 4 “We Accelerate Growth”
  • 5. BEST PRACTICES RESEARCHFactor 3: Understanding Market Needs, and OpportunitiesIBM is clearly aware of the history of midmarket skepticism towards CRM applications. Ithas witnessed many installations crash and burn with expensive, IT-resource-demandingsolutions that took months - if not years - from green lights to go-live. At the same time,the company has observed that the CRM vendor ecosystem has, for the most part, learnedfrom the experience with these installations, while catching on to evolving and newer needs,such as serving the mobile and social channels. IBM senses urgency and the opportunity toserve midmarket firms that are struggling to grow in the slow economy. CRM can make abottom-line difference for them by enhancing the customer experience and growingrevenues, while improving productivity and lowering costs.IBM has seen midmarket companies now employ CRM gingerly. The company is convincedthat with its selection of scalable, readily-deployable CRM enhancements integrated withother vendors’ advanced CRM solutions, that these companies may be more willing toembrace CRM.IBM’s BPO contact call center outsourcing services cover a wide range of functions. Theseinclude marketing, sales, fulfillment, billing and collections, product support and back officeclaims, credit card and payment processing, account maintenance and credit verification.IBM recently developed a new and unique methodology for contact centers and its BPOservices known as the Enterprise Process Innovation Continuum (EPIC). EPIC enables it toassess a company’s firms’ business processes and performance using formal methods andanalytical computer tools. IBM professionals go on to recommend and implementtechnologies to boost quality, process improvements, and process automation solutions.IBM also provides a full range of data integration, data warehousing, business intelligence,predictive analytics and multichannel collaboration solutions. This leader also partners withworld-class solution providers in order to offer clients a wide range of applications, includingintegrating CRM into ERP and SCM applications.Factor 4: IT AssuranceIt is in the IT space where many CRM applications have floundered, being complex tointegrate and requiring scarce resources. Many solutions that enhance CRM can also beresource-heavy. IT departments have reported to Frost & Sullivan about their own CRMimplementation “horror stories” and may be understandably reluctant to welcomediscussions and decisions to purchase these tools.IBM has addressed this issue in several ways. The company utilizes open source softwarethat permits developers and IT teams to quickly and inexpensively create customizedapplications. This provides investment insurance to cautious buyers. IBM has convinced themarket that cloud/SaaS delivery is a flexible and scalable option to premise-licensedeployment. IBM has created SOA-based and open source-using CRM enhancementproducts, available on-premise or in the cloud, integrated with CRM software.© 2012 Frost & Sullivan 5 “We Accelerate Growth”
  • 6. BEST PRACTICES RESEARCHIBM also brings to the table its strong brand and reputation. IBM has a long reputation forwell-developed and engineered products and services. It is backed up by a cadre ofengineers, programmers and support teams. IT departments have come to depend on IBM’srobust product set and high-quality deployments.Factor 5: A True Customer Value Enhancement SolutionFrost & Sullivan views Customer Value Enhancement (CVE) in the context of CRM as apredictive, adaptive approach to linking front and back office functions through advancedbusiness intelligence. CVE provides a customer’s-eye view of the world. It means developingnew offers that can be served up in anticipation of customer needs, a promise to servicecustomers while promoting loyalty, retention, and improved margins.IBM is making CRM viable for midmarket companies with its bundle of application/dataintegration, business intelligence, predictive analytics and collaboration solutions. Its toolsare designed to enable advanced CRM software that works seamlessly with anycommunication channel on any device.When benchmarked against competitive CRM solutions, IBM is providing superior customervalue enhancement that builds profitable long-term relationships with empowered,demanding customers. Frost & Sullivan expects that this strategy will promote furthergrowth within the IBM partner ecosystem.ConclusionMidmarket companies depend on CRM applications with advanced functionality. The goal isto complement products and services in the market with provide front-line employees withthe intelligence they need to enable their companies to stay competitive.Frost & Sullivan recognizes IBM for its excellence in the design, marketing and deploymentof its CRM applications for the midmarket. It truly represents a world-class value addservice capability. Frost & Sullivan firmly believes that IBM will continue to delivermeaningful solutions that enhance the customer service experience, promote strong brandloyalty, and bring about high levels of performance and profitability for its clients. Frost &Sullivan is therefore quite pleased to present the 2012 Customer Value Enhancement Awardto IBM.© 2012 Frost & Sullivan 6 “We Accelerate Growth”
  • 7. BEST PRACTICES RESEARCHThe CEO 360-Degree PerspectiveTM - Visionary Platform for GrowthStrategiesThe CEO 360-Degree Perspective™ model provides a clear illustration of the complexbusiness universe in which CEOs and their management teams live today. It representsthe foundation of Frost & Sullivans global research organization and provides the basis onwhich companies can gain a visionary and strategic understanding of the market. The CEO360-Degree Perspective™ is also a “must-have” requirement for the identification andanalysis of best-practice performance by industry leaders.The CEO 360-Degree Perspective™ model enables our clients to gain a comprehensive,action-oriented understanding of market evolution and its implications for their companies’growth strategies. As illustrated in Chart 5 below, the following six-step process outlineshow our researchers and consultants embed the CEO 360-Degree Perspective™ into theiranalyses and recommendations. Chart 2: CEOs 360-Degree Perspectiv e™ M od e l© 2012 Frost & Sullivan 7 “We Accelerate Growth”
  • 8. BEST PRACTICES RESEARCHCritical Importance of TEAM ResearchFrost & Sullivan’s TEAM Research methodology represents the analytical rigor of ourresearch process. It offers a 360-degree view of industry challenges, trends, and issues byintegrating all seven of Frost & Sullivans research methodologies. Our experience hasshown over the years that companies too often make important growth decisions based ona narrow understanding of their environment, leading to errors of both omission andcommission. Frost & Sullivan contends that successful growth strategies are founded on athorough understanding of market, technical, economic, financial, customer, bestpractices, and demographic analyses. In that vein, the letters T, E, A and M reflect ourcore technical, economic, applied (financial and best practices) and market analyses. Theintegration of these research disciplines into the TEAM Research methodology provides anevaluation platform for benchmarking industry players and for creating high-potentialgrowth strategies for our clients. C h a r t 3: B e n chm a rk i n g Pe rf o rm an c e w i th TE AM Re s ea r chAbout Frost & SullivanFrost & Sullivan, the Growth Partnership Company, enables clients to accelerate growthand achieve best-in-class positions in growth, innovation and leadership. The companysGrowth Partnership Service provides the CEO and the CEOs Growth Team with disciplinedresearch and best-practice models to drive the generation, evaluation and implementationof powerful growth strategies. Frost & Sullivan leverages 50 years of experience inpartnering with Global 1000 companies, emerging businesses and the investmentcommunity from more than 40 offices on six continents. To join our Growth Partnership,please visit http://www.frost.com.© 2012 Frost & Sullivan 8 “We Accelerate Growth”