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  • 1. April 27, 2009Best Practices: CustomerOnboardingby Craig Le Clairfor Business Process & Applications Professionals Making Leaders Successful Every Day
  • 2. For Business Process & Applications Professionals April 27, 2009 Best Practices: Customer Onboarding A visible target During Economic uncertainty by Craig Le Clair with Connie moore, Peter Schmidt, and ralph vittiExECut i v E S u m mA ryTake customer onboarding . . . please. Customer onboarding lags behind other business processes inboth the quality of customer experience and costs. The poor state of customer onboarding results incustomers abandoning the application process, loss of customers, regulatory fines, and damage to thecorporate brand. Best practices have addressed these issues through improved transaction managementwith enterprise content management (ECM) technologies, the use of rich Internet applications, adoptionof e-signatures, better distributed capture, and a transition to a client-centric onboarding strategy.Applying these best practices — especially during a deep economic downturn — can help businessprocess and apps professionals save money and even help push green IT forward.tABL E O F CO n tE n tS n Ot E S & rE S O u rCE S 2 Optimizing Onboarding Is Harder Than It Forrester interviewed 15 businesses, including Looks Fidelity, illinois mutual, northwestern mutual 5 But Despite The Challenges, Business Process Life insurance, and others that did not want their Improvement Is Worth The Effort names disclosed. We also documented customer onboarding issues from enterprises during 7 Best Practices Will Make It Easier To Succeed With Onboarding Improvements inquiry. We also interviewed 10 vendors that specialize in ECm, e-forms, systems integration, 9 Best Practice No. 1: Use ECM To Improve strategy consulting, and document processing Transaction Management services including, Adobe, DocuSign, Hyland12 Best Practice No. 2: Move To Distributed Software, iBm, infosys technologies, Laserfiche, Capture omtools, Oracle, Perceptive Software, and xerox.13 Best Practice No. 3: Have A Paper To E-Forms/ RIA Strategy Related Research Documents16 Best Practices No. 4: Move To “Client-Centric” “in Good times And Bad, Document-Centric Onboarding Web transactions Lower Costs And improve Experience”17 Best Practices No. 5: Use E-Signatures To Get December 17, 2008 Paper Out Of The Process18 Forrester’s Customer Onboarding Next “the Persuasive Content Architecture” Practices July 2, 200819 How To Get Started: Identify Your Challenges “market Overview: Document Output21 Supplemental Material management” February 8, 2008 “Financial institutions: Fix Account Opening” October 4, 2006 © 2009, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please email clientsupport@forrester.com. For additional information, go to www.forrester.com.
  • 3. 2 Best Practices: Customer Onboarding For Business Process & Applications Professionals OPTIMIzING ONBOARDING IS HARDER THAN IT LOOkS The customer onboarding process occurs when an enterprise sets up an account to acquire a new customer or business partner. For some products or services this is straightforward — for example, if the customer has an existing relationship with the enterprise or the value of the product is low. In this case, the account can be funded easily and the enterprise can link account forms to customer details they already have. In other cases — where the value of the service is high, or there is a diverse set of subproducts or strong regulatory requirements — the process can be complex (see Figure 1). Two major use cases for onboarding applications exist: · Higher-value transactions require solutions that target an intermediary. Such as an agent or broker — who collects the information to onboard the client. · Lower-value transactions require an application that serves customers directly. Applications take either online or paper forms. Challenges for both transaction types are many, but interviews with enterprises show that getting the right information, addressing the diversity of systems and processes, and handling way too much paper in the business process top the list of pain points. According to Infosys Technologies, a systems integrator with focus in customer onboarding, this difference is striking within the insurance industry. Individual property and casualty (P&C), for example, is commoditized. Transaction values are small and predictable, and a high percentage of the transactions require no human review. P&C product review and onboarding, as a result, is moving rapidly online.1 Life and annuity, in contrast, has higher value and transactions, a diversity of subproducts, and high regulation. As a result, higher-value transactions are well behind in automation and online servicing — even within the same insurance company. April 27, 2009 © 2009, Forrester research, inc. reproduction Prohibited
  • 4. Best Practices: Customer Onboarding 3 For Business Process & Applications ProfessionalsFigure 1 Complexity Driven By transaction value, regulation, Products, And Channel Diversity Complexity Variable annuity Brokerage New plan (401k) Loan origination Value of Import nancing transaction Insurance policy New loan (commercial) syndication Insurance policy (auto) New lease Bank account origination opening eCommerce Credit card transaction origination Number of products, regulation, people support, and channel diversity47060 Source: Forrester Research, Inc.Challenge No. 1: Collecting The Right Information While Maintaining Customer ExperienceBalancing the customer experience with expanding information needs is perhaps the biggestchallenge that enterprises face. Collecting information can be a struggle when: · No reliable information about the customer exists. Customer onboarding must collect and validate a range of customer details. Often, this includes a profile of the customer, complete with credit and employment history. The business often has some of this information, or the information is available publicly, but it’s challenging to integrate external data easily. · Regulations require additional information. Regulatory issues add complexity to the process. For example, requirements from state and federal regulators such as the Bank Secrecy Act (BSA), USA Patriot Act, and anti-money laundering (AML) challenge this business process, as does the Health Insurance Portability and Accountability Act (HIPAA) in healthcare.Challenge No. 2: Addressing The Diversity Of Products, Technology, And LOB Data ModelsThe diversity of products and use cases remains the largest barrier to transforming customeronboarding. Different lines of business (LOB) tend to view customers differently from aninformation standpoint and create divergent collection practices. Our research shows that leadingproblems stem from:© 2009, Forrester research, inc. reproduction Prohibited April 27, 2009
  • 5. 4 Best Practices: Customer Onboarding For Business Process & Applications Professionals · Too many products involved — each with its own record-keeping needs. The process is more complex when the product offered comprises a diverse set of products and services. In financial services, it’s common to have investment products from a variety of mutual funds or insurance companies. Variable annuities, for example, combine securities and insurance products within a single annuity contract. Suitability, disclosure, other mandated forms, and specifics to each product can be overwhelming to the customer to provide and for the enterprise to manage. Further, the right account information must end up in the official “books and records” of multiple investment product issuers — creating integration challenges across department and business partners. · Legacy systems still drive divergent information and business rules. In many enterprises the forms, business rules, and data fields are dictated by legacy systems that are expensive to change. A large financial institution may have 100 different products controlled by 30 different back-office systems. Customer onboarding must integrate with and use a vast variety of forms and divergent procedures to support these systems.2 · Diverse technologies and applications often defy integration. Most customer onboarding systems involve a number of in- and outbound processes that may be a combination of internal and outsourced capabilities. The tendency is to optimize point solutions around each of these due to the expense of true integration. Enterprises are creating process improvement teams to look across department processes.3 The onboarding process is ripe for these business process improvement initiatives. Challenge No. 3: Explosion In Content Types — And Still Way Too Much Paper Companies that we interviewed struggle to manage the variety of inbound content that comes from their customers. Not only are there multiple channels to coordinate, but the customer interaction often spans more then one channel. In addition, multiple content types like e-forms, email, voice, fax, and PDF are prevalent in a single channel — and paper is still not going away. Enterprises struggle with: · Multiple channels and diverse content types to deal with. Today, businesses must deal with multiple channels, like the call center, the Web, kiosks, mobile devices, and the mail for collecting and disseminating account information. Each channel has different supporting technology and business processes that result in lack of process standards and poor service- level agreement (SLA) management. Consistent levels of service require coordination among these channels, which is difficult today.4 The paper world — despite its inefficiency — had one primary use case and the customer and company staff were well-trained in that simple paper model. It was slow but had a small number of potential variations. The following comment from an IT executive typifies the frustration in most companies: April 27, 2009 © 2009, Forrester research, inc. reproduction Prohibited
  • 6. Best Practices: Customer Onboarding 5 For Business Process & Applications Professionals “We now need to support email attachments, faxes, and scanned images at our branches. We are not sure whether to integrate point solutions ourselves or go with the fuller tool kits by the major capture vendors that really haven’t delivered the promised ‘Web services’ type integration.” (Senior IT executive, leading wealth management broker) · Lost productivity due to paper bottlenecks. Customer onboarding for many enterprises still remains a very paper-intensive process, and even online accounts often introduce paper into the process. Paper inevitably slows a process down. It introduces too much rework, data entry, and manual interventions. Paper requires business people to search, copy, manually route, file, and spend time tracking the status of paper documents. Even companies committed to going paperless still struggle. For example, Illinois Mutual — a 100-year-old insurance company — drives through a series of scripts for account opening and has organized the back-end workflow staffs by state. They hope to get paper out of the process, yet: “As much as we are trying to get away from paper, our noncaptive agent force is ‘seasoned’ and will not do things electronically. As a result, over 50% of the registration process for new agents is still submitted on paper. It is even worse when existing agents sign up new policy owners. These are running 80% paper and only 20% electronic. However, we saw a strong trend in 2008 for electronic applications as our agent workforce starts to turn over to a Gen X workforce. These new agents are less interested in personal relationships and more interested in volume.” (Enterprise architect, Illinois Mutual) · Archaic fulfillment processes for welcome packages. Onboarding for higher-value products often requires a set of documents to be physically signed. The customer onboarding information may be captured online or with an internal forms application, but the last mile of the process is to create and print e-forms and a fulfillment package for the customer. Best practice dictates that all forms are bar coded with metadata captured during the front end of the process to simplify inbound capture. Yet in most cases there is no inbound-outbound integration. Preparation of the package is usually manual and cumbersome, and added expense must be properly captured when returned by the customer.BUT DESPITE CHALLENGES, BUSINESS PROCESS IMPROvEMENT IS WORTH THE EFFORTBusinesses we contacted report strong returns on investment (ROIs) for improving customeronboarding processes. These were often multiyear projects led by cross-departmental teams andsupported by outside consultants and systems integrators. Process improvement was measured —for the most part — by hard cost savings and less by less tangible benefits of enhancing the customerexperience or customer retention.© 2009, Forrester research, inc. reproduction Prohibited April 27, 2009
  • 7. 6 Best Practices: Customer Onboarding For Business Process & Applications Professionals The strong ROI results are based on hard cost savings such as reductions in full-time employees (FTEs), lower paper management expenses, and accelerated order-to-cash cycles. Few enterprises could quantify less tangible benefits such as customer retention, lost business to abandonment of an application, reduced calls to call center, or cross-selling and campaign optimization. Largely, these were not systematically measured to allow quantification. Yet, the executives we talked with felt these tangible benefits were a multiple of hard cost savings (see Figure 2). The highest ROI is experienced when paper is eliminated throughout the process, but other benefits helped the business case as well. Examples of businesses with process improvement projects that delivered high ROI include: · Life and investment underwriters benefit from virtualization. One large insurer went paperless for its life and investments division underwriting process. It was not an easy project. It took three years to complete 10 stages and finished in 2007. Wet signatures — and hence paper — were coming from small medical establishments. Now they are all scanned and moved through the onboarding process using IBM workflow automation developed by Infosys, the primary systems integrator on the effort. Benefits across the different areas included reduction of 40 staff and reached $3 million in savings annually. The cost of the system, however, was $20 million including hardware, IT labor, business costs, change management, and training — leading to a breakeven over a painfully long seven or eight years. The insurers measure savings per $100 of premium and in this case they lowered administrative costs by 5%. Intangible benefits also accrued from “virtualizing” their environment — freeing the processing from remaining in one physical location. · Telco gets needed regulatory reporting. Onboarding can be for B2B processes as well as consumer-based processes. One of the larger telcos receives thousands of new requests from CLECs — regional telcos — each day to order cable, movie, or other bundled services. Orders were received by fax, with service staff keying in the data from the fax, until the new onboarding solution went live. Optical character recognition (OCR) of the faxed information was reviewed but was unsuccessful. The new system uses e-static e-forms that are emailed as attachments. A business process management (BPM) system provided by Oracle picks up the new order and routes it to service staff — if necessary — and provides needed reporting for regulated response times on these requests to avoid penalties. The system allowed redeployment of 20% of the services reps for the old system and is saving millions of dollars a year.5 · Broker-dealers reduce cycle time for onboarding new clients. VSR Financial Services — a broker-dealer serving 250 independent advisors — is a typical example. The order process used to include manually routing physical paper to between three and six different people. VSR Financial Services has made the new order process more fluent, increased its consistency, and improved compliance. ROI was measured by increasing each processor’s productivity by 33%.6 Instead of manual filing, searching, and retrieving paper account forms, they work from an inbox and click on an organized set of documents for the new account. April 27, 2009 © 2009, Forrester research, inc. reproduction Prohibited
  • 8. Best Practices: Customer Onboarding 7 For Business Process & Applications ProfessionalsFigure 2 Customer Onboarding rOi is Dominated By intangibles Customer onboarding can net dramatic cost savings if the organization has fallen way behind in automation (i.e., is still Op paper-based). era Reduce paper tio na Reduce sta time l Improve cash ow Retain customers Str Improve cross-selling ate gic Improve quality control Few enterprises could measure these bene ts to help support Reduce employee turnover revised onboarding initiatives. Reduce management time Value accrued to onboarding e ort47060 Source: Forrester Research, Inc.BEST PRACTICES WILL MAkE IT EASIER TO SUCCEED WITH ONBOARDINGIMPROvEMENTSWe interviewed business process and information management professionals, senior ITprofessionals, enterprise content management (ECM) and document processing service providers,and leading consulting companies to find out how successful customer onboarding projectswent. Like all good ideas, the best practices that we identified sound quite simple, but many of theprofessionals in leading enterprises we interviewed have spent years working toward these goals,and the groups that have successfully implemented these practices constantly struggle to maintainthe ground they’ve gained. The four best practices that surfaced during our interviews include (seeFigure 3): · Use ECM to improve transaction-management. Customer onboarding applications should take advantage of rapidly improving ECM capabilities. When working with traditional imaging technologies, such as capture and workflow, BPM, business rules, document output management, and electronic forms can all play a role to take paper out of the process and streamline the cross-functional process that onboarding really is.© 2009, Forrester research, inc. reproduction Prohibited April 27, 2009
  • 9. 8 Best Practices: Customer Onboarding For Business Process & Applications Professionals · Move to distributed capture. Document capture is at the heart of the best customer onboarding processes. Really good onboarding processes capture richer content as close to the customer as possible and leverage local scanning devices for paper forms, e-forms, and self- service sites. The best projects put a strong focus on the quality, richness, and efficiency of the capture process so that paper is taken out of the equation as early in the process as possible. · Create a paper to e-forms/rich Internet applications (RIA) strategy. E-forms and RIAs are increasingly used to capture customer data, serve as an interface to a process step, and bridge the paper-digital divide. It is no surprise that migration of paper to electronic application forms is a key aspect of mature customer onboarding processes. · Use e-signatures to get paper out of the process. Electronic signatures usage is on the rise and can help enterprises streamline customer onboarding processes, save costs, and improve transaction security. Instead of forcing the customer to print out forms, sign them, and either fax them back or mail them, e-signatures cut out the paper form entirely while providing a secure way of capturing the customer’s signature electronically. · Move to “client-centric” customer onboarding. Client-centric customer onboarding means more than pre-filling forms to make onboarding simpler for the customer. A client-centric approach collects information at the customer level first — independent of the specific product the customer is buying at the moment. That way, when the customer returns to buy another product, onboarding is simplified and streamlined from the customer’s perspective. April 27, 2009 © 2009, Forrester research, inc. reproduction Prohibited
  • 10. Best Practices: Customer Onboarding 9 For Business Process & Applications ProfessionalsFigure 3 Client-Centric Customer Onboarding Goals Category Process goal Product information and selection • Common product catalog • “Shopping cart” or similar model Data collection • Prefill from marketing databases for known data for all applicants • Leverage public information for pre ll and prompt for unknown data • Apply rules for each product Document output for customer • Automate and simplify multichannel communications management communication tasks • Welcome kits with inbound-outbound integration • E-signatures Compliance and disclosures • Consolidated signature across products and compliance forms • Execute rules for USA Patriot Act and other regulations • Enhanced risk management • Lower operational risk Administrative capabilities • Identify process for users • Save and restart capability within and across channels • Visibility across channels • Reporting47060 Source: Forrester Research, Inc.BEST PRACTICE NO. 1: USE ECM TO IMPROvE TRANSACTION MANAGEMENTEnterprises that are most successfully managing customer onboarding make use of image captureand workflow, document management, BPM, business rules, document output management, andelectronic forms (see Figure 4). The ECM system manages the unstructured content aspects of theprocess in sync with the transaction system, which manages the structured data. Specifically, theECM system manages documents and forms, exchanging metadata (e.g., name and address on theform) with the transaction system. The transaction system, in contrast, would provide the newcustomer account number that ties it to content in the ECM system.For example, customer onboarding may start with a Web-based form. As the customer entersbasic profile information, additional data required for the product or service is pulled in froma marketing database or customer relationship management (CRM) system — thus saving thecustomer keystrokes and time. At some point, based on the guided navigation, an e-form is created© 2009, Forrester research, inc. reproduction Prohibited April 27, 2009
  • 11. 10 Best Practices: Customer Onboarding For Business Process & Applications Professionals and routed (using BPM) for internal approval. Finally, a document output customer communication management system creates a summarized form for the customer’s signature.7 In the process, a bar code may be created for the outgoing package with data encoded for the records management and archiving (ECM system) in support of downstream workflow processes. Two other technologies that are frequently used in conjunction with the core ECM system are: · Business process management. BPM can be the primary integration tool between the front-end account opening process and the back-office systems. BPM automates new business application tasks from collecting data to creating, sharing, and tracking it as work moves from the customer through account support staff, production staff, and transaction systems.8 Passing information among front- and back-office systems with BPM control can significantly increase the “speed to revenue.” Less mature and nonautomated systems can take three or four weeks to complete — after the customer has already agreed and finished her part of the process. Best practice firms had closed the cycle time to three or four days by using BPM. One leading bank used HCL Technologies, a large systems integrator with a focus on custom onboarding, to implement an IBM FileNet P8 solution for a revised credit card application process. This process used the FileNet workflow to coordinate online and paper submissions. Approvals are now done within 60 seconds due to reduced turnaround times and reuse of existing data. The bank achieved improved decision- making, control, and flexibility in the credit management process. · Document output for customer communications management. ECM tools like document output for customer communication management can assemble the correct form packages, automate requests for supporting documentation, create the correct forms and supporting documents, and provide a single point of entry to reduce paper handling.9 Personalized and summarized single file welcome kits can be built using interactive document output customer communication management tools.10 This process avoids leaving the customer with one giant envelope of paper. Customized cover letters can be generated using the latest template-based authoring approach to drag and drop personalized content into a cover letter template with the appropriate compliance language. April 27, 2009 © 2009, Forrester research, inc. reproduction Prohibited
  • 12. Best Practices: Customer Onboarding 11 For Business Process & Applications ProfessionalsFigure 4 ECm For Customer Onboarding Field Front end: Front end: Front end: o ce call center Web mail Point of service ECM components E-forms RIAs Distributed capture Fax servers E-signatures Client-centric enrollment layer Common product Business process Business rules Document output for customer catalog management engine communications management • Prepopulation • Document • Credit risk • Welcome kits • Cross-selling veri cation assessment • Barcoding • Business data • Application • Customer validation decision communication • Reference check analytics Credit check Insurance Retail Loan Citizen Consumer banking management support products Legacy system applications47060 Source: Forrester Research, Inc.Pitfalls To Avoid: Don’t Overlook People Issues And Project Management Best PracticesA new customer onboarding process should blend new technology with human and enterprise workpatterns. Enterprise work patterns are the organizational, cultural, and online and offline activitiesthat make up a business process. For onboarding these activities include the inbound and outboundtasks of receiving, capturing, processing, managing, and disseminating customer information. Forexample: · Ignoring people and cultural issues are pitfalls. We discovered that a common pitfall in unsuccessful projects was the poor balance of management attention between people and technology issues. Across the board the people we talked with regretted not focusing enough on the cultural and change management issues. Comments like this were typical:© 2009, Forrester research, inc. reproduction Prohibited April 27, 2009
  • 13. 12 Best Practices: Customer Onboarding For Business Process & Applications Professionals “Technology isn’t hard, it’s the culture changes. We’ve had a lot of people here over 35 years. Changing the way we do things was hard. We did a forklift across the board. People just couldn’t inhale the whole thing so we stepped back and looked at incremental opportunities and found that to be very effective.” (Vice president, operations, life insurance company) · Project management for ECM matters too. Most firms we talked with have multiple ECM technologies and initiatives. In the haste to get a specific project going, many do not take the time to see how to leverage these initiatives. This comment was typical: “It turned out we had five different projects doing imaging. We asked ourselves whether we should do it the same way as some of these other projects but decided not to slow down our efforts. In retrospect, we should have spent more time on this.” (Vice president, enterprise architect, major insurance company) BEST PRACTICE NO. 2: MOvE TO DISTRIBUTED CAPTURE The best projects put a strong focus on the quality, richness, and efficiency of the capture process —which is at the core of the onboarding process. Key aspects include: · A strong move to distributed capture. Enterprises understand that paper introduces bottlenecks and reduces process cycle time. The most successful projects linked multifunctional peripherals (MFPs) in distributed locations — such as branches — into customer onboarding and other business processes. According to one financial services company: “Our service delivery platform has initiated the distributed image capture project to provide front-office staff and clients with the capability to submit documents, client applications, forms, etc., to fulfillment processing centers electronically via our multifunction print/scan/ fax machines located at branches across North America. The objective of the program is to provide faster, more efficient routing of documents to departments in the back office, thereby reducing cycle time for end-to-end fulfillment of client documents. We expect reduction in duplicate submissions, lost documents, and reduced rework, ultimately reducing our costs while improving the customer experience.” (Vice president, large diversified financial services provider) · Not forgetting fax. Fax is still at the core for many business transactions. Email may be great for day-to-day communication, but fax has a higher legal status and provides for “wet” signatures required on many documents. In a recent review of the brokerage market, more than 30% of incoming forms for small and medium-size brokerages or correspondents were received by fax.11 One of the big pushes by vendors is to extract data out of fax, much the way data are OCR’d from scanned images (which have higher resolution and hence better extraction results).12 New technologies like fax over IP (FoIP) and increasing demand for rapid, reliable electronic document (e-document) delivery are driving the continued expansion of fax.13 Several enterprises were upgrading fax systems with OCR as stepping stone to e-forms. April 27, 2009 © 2009, Forrester research, inc. reproduction Prohibited
  • 14. Best Practices: Customer Onboarding 13 For Business Process & Applications Professionals “We are looking at our “order-to-cash” process. We currently manually enter data from faxes into SAP, and we now will use OCR and verification to do this. We will reduce errors into our SAP master data set and avoid entering the wrong account number or product code. We project a savings of $250,000 to $400,000 in labor per year.” (Enterprise architect, midsize life and annuity company) · Taking a coordinated multichannel view to capture for customer onboarding. A revised customer onboarding process should consider all channels and use cases. Focus on the future “Web channel” to migrate product-specific forms and data collection. Capture a consistent set of data from each channel. Think in terms of a “data model” that does not vary whether the customer interacts with the contact center, e-form, paper form, or other channel. A consistent data model will ease transition among channels.Pitfall To Avoid: Failure To Marry Capture Implementations With Hardware UpgradesIntegrating office devices with customer onboarding is more difficult than it first appears. Scanningmay be free on the device but there may be some hardware upgrade required. There also may beconnecters required to link MFP devices into the customer onboarding process or ECM system.14 Insome projects these additional expenses were not budgeted and led to confusion as to which budgetshould be tapped.BEST PRACTICE NO. 3: HAvE A PAPER TO E-FORMS/RIA STRATEGYEnterprises cannot switch off their supply of paper forms tomorrow and assume that customerswould switch immediately to online applications. For one, the target audience for high-valuefinancial products is still in the age group that distrusts technology, especially for transactions thatinvolve large percentages of their life savings. However, the industry direction is clear — migratingcustomers to the Web — and best practice firms are being successful. E-forms and RIAs areincreasingly used to capture customer data, serve as an interface to a process step, and bridge thepaper-digital divide. Economic challenges push companies to work harder to migrate customers tothe less expensive Web channel. Best practices enterprises include: · Know when to use e-forms or RIAs to drive the customer experience. Business process professionals working on each onboarding application should carefully consider when to use an e-form or build an RIA. RIAs can be used to create a “wizard” or interview process to collect needed data. The wizard can include discovery questions to trigger specific needs and allow a targeted approach that fits a customer’s needs. RIAs also help when data entry is complex — perhaps involving many possible products. In these cases a guided process will lower abandonment rates, particularly when the customer is not that familiar with a form, is a casual user, or the onboarding application involves a complex and seldom used process with lots of unfamiliar steps. In these situations, extended help can© 2009, Forrester research, inc. reproduction Prohibited April 27, 2009
  • 15. 14 Best Practices: Customer Onboarding For Business Process & Applications Professionals be leveraged (e.g., a mortgage application). E-forms are great for the proficient user — familiar with a process or form type — who does not want to be burdened with an interview process, or for a regulated or familiar form type. It is also easier to make frequent changes to an e-form versus a RIA, so more static applications are better for RIAs (see Figure 5). · Realize when offline form support is required. RIAs are great but sometimes the customer needs to save a form — maybe print it out — and go find the right information from that file cabinet in the basement. RIAs are great when customers have all the needed data at their fingertips, but when they need to research a matter, push out an e-form. A hybrid approach is often a winner. For example, use an RIA but build the form in the background. Provide an option to save the form. If a digital signature is not being used, the form can be printed out and signed with a bar code added for inbound processing. This blends the value of the RIA with the value of the traditional e-form. · Make it as easy and transparent as possible, and monitor the process. The onboarding process has become complex over the years — due to compliance and overall complexity of product choices. Extensive, tedious, and overwhelming forms create “drop outs.” The best business process professionals get it — and make it simple and painless. Entering data over and over again — like collecting the same data for a wire transfer form as for initial application — is just dumb with the available technology today. According to one company, transparency in the process will increase customer satisfaction. A simple step-by-step process report of where the person is that includes all of the steps with a timeline shows the customer that you care. Another firm is having success monitoring the process in real-time and offering human assistance and extended help. · Dynamically build integrated terms and conditions sheets from the RIA. Account opening processes can have 15 or more terms and conditions or compliance forms to sign. These will not decrease in number any time soon. Best practice is to dynamically build — based on the discovery or wizard process — a single integrated form for signature that aggregates all needed disclosures. Adobe, for example, provides this capability as part of its Solution Accelerators for account opening. April 27, 2009 © 2009, Forrester research, inc. reproduction Prohibited
  • 16. Best Practices: Customer Onboarding 15 For Business Process & Applications ProfessionalsFigure 5 identifying When to use E-Forms versus riAs For Onboarding E-forms RIA Onboarding A well-known form type Complicated steps and logic complexity where paper version is familiar will favor RIAs that can help the favor e-forms. user through the process. Role and Professional users favor First-time users not familiar work style e-forms, e.g., business routinely with the capture process can ordering or terminating a be guided by RIA navigation service. and contextual help. Rate of change to Frequent data changes are Change is more expensive for onboarding process more easily made with e-forms. RIAs and require higher levels of skill. Minimal change favors RIA usage. Session A requirement for entering data When data is known or readily characteristic o ine with frequent available and session can be interruptions to nd missing reliably completed in 10 information favors e-forms. minutes or less — favors RIAs. Government license Many government issued forms RIAs can speed collection and registration have regulatory barriers to processes and link with case revising the collection process. management work ows.47060 Source: Forrester Research, Inc.Pitfalls To Avoid: Not Having A Paper To E-Forms/RIA StrategyThere is no shortage of pitfalls for e-form projects: integration with legacy systems; migration ofexisting forms types to the new e-forms format; maintaining versioning for the e-forms library; and,the hardest of all, deciding how to reorganize forms to be consistent with the Web, the familiar paperview, and deciding what fields to get rid of. Yet — given these — you can really go wrong if you: · Select the wrong e-forms product. Forrester answers numerous inquiries per year from business process professionals and information managers trying to decide on the right e-forms provider. The market is led today by Adobe and IBM, with the Lotus Notes version 4. Both are strong products but have different strengths. Adobe leads in customer usability — and forms design — and is good for when the form user is disconnected from an Internet connection. IBM leads in automation, stronger integration, and scalability. It is a battle between the user experience and IT. According to one enterprise: “The IBM product was easier to integrate, so it made sense for us to use it. We were a WebSphere shop. But our marketing guys said, ‘You know what — common sense isn’t enough in today’s world . . . the user experience is key. If you go to the less expensive and easier solution that works with infrastructure, you can defeat your purpose — which is to© 2009, Forrester research, inc. reproduction Prohibited April 27, 2009
  • 17. 16 Best Practices: Customer Onboarding For Business Process & Applications Professionals increase online adoption.’ As an insurance company, we found IBM had the best e-forms and BPM capability for our IT infrastructure . . . but found Adobe — with over a million potential users with lots of offline capability — was a better user experience.” (Enterprise architect, large life insurance company) · Worry too much about potential “customer churn.” One European bank had delayed its online onboarding due to fear of losing customers. A personal touch was the hallmark of its business. Yet after launching the online service, they found just the opposite. The online channel had higher retention rates and stronger brand loyalty. Fears of customer churn had actually kept the bank from realizing greater benefits all along. · Connect to business processes in nonstandard ways. There are several ways to connect data from e-forms to business processes, ECM systems, or enterprise apps. Many enterprises have developed custom e-forms solutions or, in a haste to get e-forms up and running, used nonstandard methods of moving data. XML and Web services support — common in developed e-forms solutions — will ensure that data from all channels can be processed in consistent ways by upstream applications. BEST PRACTICE NO. 4: MOvE TO “CLIENT-CENTRIC” ONBOARDING A client-centric approach collects information at the customer level first — independent of a specific product and creates a “client profile” for new customers. The profile routinely interacts with marketing databases to gather the latest information. The “customer profile data” is then used to populate the product-specific form. This simple concept is providing value to enterprises’ advantage (see Figure 6). For example, Fidelity uses a client-centric approach for its RIA customer onboarding process. The application collects existing client data through the CRM application and pre-populates fields required by Fidelity advisor forms. Figure 6 Customer Onboarding Best And next Practices Best practices Next practices • Use ECM to improve transaction management. • Collect data to meet customer retention • Move to distributed data capture. goals. • Have a paper to e-forms/RIA strategy. • Segment demographics to drive online • Move to client-centric customer onboarding. adoption. • Use e-signatures to get paper out of the process. 47060 Source: Forrester Research, Inc. April 27, 2009 © 2009, Forrester research, inc. reproduction Prohibited
  • 18. Best Practices: Customer Onboarding 17 For Business Process & Applications ProfessionalsPitfalls To Avoid: Insufficient vision, Project Teams, And GovernanceFor many enterprises, client-centric approaches represent a new way of thinking that is more of ajourney then a specific project. Primary pitfalls included: · Not developing a clear strategic vision. To be successful, develop a clear strategic vision and ask the right questions. Successful projects involve a fair amount of time spent upfront on solutions design, have a clear business case, and provide adequate importance to the proof of concept (POC). For one insurance implementation, a POC was provided well ahead of time to influential underwriters. By the time the system was ready they were begging to use the new approach. · Trying to do it alone. Successful client-centric projects reach out to influential process stakeholders to seek advice, counsel, and support. These include BPM centers of excellence, and performance management initiatives such as Lean Six Sigma and Balanced Scorecard that focus on cross-divisional process transformation.15 · Putting the wrong team together. Several projects we reviewed left the implementation to tactical teams that did not have linkage and support to senior management. This resulted in improvement to only one channel, or only one of the company’s products, and poor leverage of in-house technology. Only a modest improvement to the customer experience occurred.BEST PRACTICE NO. 5: USE E-SIGNATURES TO GET PAPER OUT OF THE PROCESSElectronic signatures can help enterprises streamline customer onboarding processes, save costs,and improve transaction security. Despite these benefits, however, firms still view e-signatures withtrepidation — heterogeneous legal environments around the globe make it difficult to know when,where, and how to use them.16 Yet, financial services firms like Wells Fargo and Fidelity Investmentsare beginning to change these perceptions.17 Fidelity, for example, recently announced a Web-basede-signature capability for independent registered investment advisors to automate the new customeronboarding process.18Using Web sites to collaborate with customers and finalize documents, Fidelity then usesinformation from internal customer databases, external public challenges, and connectionverification to authenticate the signer.19 Advisors will no longer need to send account formsthrough the mail or have clients come into their office to sign paperwork. Advisors and clients willelectronically sign all documents to establish and fund a brokerage account.20 Once signed by theclient, the advisor can forward the forms electronically to Fidelity for customer onboarding. Fidelitythen sends an electronic notification to the advisor along with a status number, enabling the advisorto track the progress and status of the transaction. Improved customer service was Fidelity’s goal.© 2009, Forrester research, inc. reproduction Prohibited April 27, 2009
  • 19. 18 Best Practices: Customer Onboarding For Business Process & Applications Professionals “Our investment in this new e-signature capability is indicative of our belief that service in our industry must be transformed to maximize a firm’s success and deliver a great experience for end clients.” (Senior vice president, Fidelity Institutional Wealth Services) And even in insurance — long a bastion of paper handling — there’s progress. One midsize insurance company has introduced e-signatures for its life insurance product line. Electronic applications now do not require a wet signature. A full set of “locked documents” are provided to the AlphaTrust PRONTO service to manage the completion/execution phase of the document process.21 But many use cases are just not ready. Despite progress, many firms receive just too many documents from third parties in paper, or legal still requires a wet signature. One large insurance company that applied ECM to an insurance underwriter was typical: “We would love to see the e-health initiative take hold, but until then we must manage paper records from doctors. But at least scanning them in lets us not be dependent on our one physical processing location. Digitizing the paper allowed us to “virtualize the process.” We received a lot of intangible benefits due to virtualization.” (Senior project manager, major insurance carrier) Pitfalls To Avoid: Not Getting Legal And Compliance Involved Early Not involving legal and compliance early enough can be expensive and embarrassing. Several projects reviewed the proposed e-signature process with compliance early — before significant investment. The best projects walked compliance step by step through a POC. Others did not and suffered in the end as expensive changes were required. FORRESTER’S CUSTOMER ONBOARDING NExT PRACTICES The economy will drive the business’ focus on lowering the costs of servicing customer but best practices today are too focused on process efficiency (i.e., reducing the time to onboard a customer and reducing the cost of onboarding). Next practice will collect demographic and consumer preference data to determine the optimal channel and message content to improve customer experience and lower servicing costs. While our research uncovered a number of office optimization best practices, here are some next practices that business process and application pros should focus on once they’ve mastered the basics: · Collect data to meet customer retention goals. Economic times have shifted focus from customer acquisition to retention. Current collection practices lack context, history, and systematic measurement. They also lack the focus on higher-level goals like customer retention. For example, they don’t execute strategic “touch points” in the critical first year, have limited coaching on content or approach, and pound the new customer with product-centric April 27, 2009 © 2009, Forrester research, inc. reproduction Prohibited
  • 20. Best Practices: Customer Onboarding 19 For Business Process & Applications Professionals sales messages. Next practice is a broader focus toward customer retention and customer experience.22 For example, Illinois Mutual used to “pound” its customers with direct mail. Now it’s all about targeting a customer segment — like prospects for disability insurance. · Segment demographics to drive online adoption. The recession will accelerate account transactions moving to the Web. Customer self-service events for customer onboarding and maintenance will increase as enterprises “take the gloves off ” and aggressively push e-transactions. And this is before a new generation of younger, college-educated workers launches their careers. This new generation will be less happy to fill out and submit forms, fax documents, or write checks. Enterprises must proactively encourage greater volumes and diversity of on-demand transactions. A strong next practice is to segment customer populations and tailor adoption programs accordingly.23HOW TO GET STARTED: IDENTIFY YOUR CHALLENGESWhere should you start? Use this diagnostic tool to assess your current capabilities — andopportunities for improvement — and see how you stack up against your peers (see Figure 7).Scores will be calculated automatically for online readers. All scores are anonymous.© 2009, Forrester research, inc. reproduction Prohibited April 27, 2009
  • 21. 20 Best Practices: Customer Onboarding For Business Process & Applications Professionals Figure 7 Best Practices Self-Diagnostic tool Part 1: Use ECM to improve transaction management Yes No Are you using BPM to help automate new business application tasks? Have you enlisted the help of a BPM center of excellence or performance management initiative? Do you have an ECM system to manage the unstructured content related to the onboarding initiative? Have you applied document output management for customer communication to assemble the correct form packages, automate requests for supporting documentation, and provide a single point of entry to reduce paper handling? Do you have a change management plan to focus on human and organizational issues of optimization? Total Part 2: Move to distributed capture Yes No Do you have a coordinated multichannel view of capture for customer onboarding? Do you have a plan to link MFPs or local scanning devices to the customer onboarding work ow? Are you mapping out data collection goals to include demographic data to drive online servicing, enhance customer retention, and groom revenues? Total Part 3: Have a paper to e-forms/RIA strategy Yes No Do you have a plan to migrate customers o paper forms to e-forms and customer self-service Web sites? Are you clear on the use of e-forms versus RIAs for your onboarding practice? Have you developed an evaluation plan to select the next e-forms infrastructure balancing IT integration and the user experience? Have you developed a dynamic terms and conditions process for on-boarding? Is your capture strategy considering all channels and use cases, including fax? Total 47060 Source: Forrester Research, Inc. April 27, 2009 © 2009, Forrester research, inc. reproduction Prohibited
  • 22. Best Practices: Customer Onboarding 21 For Business Process & Applications ProfessionalsFigure 7 Best Practices Self-Diagnostic tool (Cont.) Part 4: Move from product-centric to client-centric account opening Yes No Can you create a “client pro le” by accessing a customer information system, CRM, or other repository rst to gather pre-existing information? Do you have a product catalog or “shopping cart” concept that centralizes access and processing of products? Can you pre ll account forms and prompt users only for missing information? Are you using advanced document output for customer communications management to generate personalized, consolidated, and compliant welcome kits? Total Part 5: Use e-signatures to get paper out of the process Yes No Have you reviewed every opportunity to use e-signatures? Have you reviewed and planned ways to incorporate e-signatures into line of business processes? Have you discussed e-signatures recently with legal? Total47060 Source: Forrester Research, Inc.SUPPLEMENTAL MATERIALOnline ResourceThe online version of Figure 7 is an interactive self-diagnostic tool that helps clients assess how theircurrent practices stack up against those of their peers.ENDNOTES1 The Web is generating more applicants then any other channel but still a larger percentage of them — 90% — are applying through traditional branch location with a smaller percentage — 70% — actually applying online. See the January 9, 2009, “Trends 2009: Insurance eBusiness And Channel Strategy” report.2 For detailed descriptions of how legacy systems affect the account opening process, please see the October 4, 2006, “Financial Institutions: Fix Account Opening” report.3 Onboarding can be viewed as a subset of customer service processes. For a review of how business process management centers of excellence help review cross-departmental aspects of customer onboarding, please see the June 20, 2008, “The BPM COE Is Here: Now What?” report.4 For a description of the inbound and outbound channels, their pain points, and what is required for the future please see the July 2, 2008, “The Persuasive Content Architecture” report.© 2009, Forrester research, inc. reproduction Prohibited April 27, 2009
  • 23. 22 Best Practices: Customer Onboarding For Business Process & Applications Professionals 5 Client reference provided by Oracle and a user of Oracle’s IPM suite of content management products. 6 VSR Financial Services used Hyland’s OnBase Workflow. The process is now automated and orders can be processed through the new accounts, order processing, and cashier departments concurrently. Source: Hyland Software (https://www.onbase.com/English/IndustrySolutions/Insurance/CaseStudies/ VSRFinancial). 7 For a description of interactive document output management, see the October 24, 2007, “Give DOM Its Due” report. 8 BPMSes are becoming critical for successful customer onboarding process management. For an overview of BPMSes for document-intensive business processes see the July 9, 2007, “The Forrester Wave™: Business Process Management For Document Processes, Q3 2007” report. 9 Document output for customer communication management is becoming a tool to manage customer interaction across channels. Personalized outbound communication packets, for example, that consolidate customer data can reduce the number of forms for signature and through bar coding and prepare data for inbound capture and workflow processing. See the October 24, 2007,“Give DOM Its Due” report. 10 Forrester published a framework for better understanding document output management. For a description of interactive document output management, please see the February 8, 2008, “Market Overview: Document Output Management” report. 11 Forrester reviewed customer onboarding for the broker dealer community and was surprised by the dependence on fax for transferring account related forms. 12 Fax application service providers (ASPs) include: Captaris RightFax (Captaris was just purchased by OpenText, the ECM vendor, and is the market lead with over 20,000 installations), Esker (their FlyDoc product has a strong fax solution that is well integrated with capture, forms, and output management), Premier Global Services, Sagem-Interstar (also a strong provider), and TOPCALL (part of DICOM — just rebranded Kofax — that also owns the Kofax capture solution). 13 Fax over IP is still not as reliable as fax over analog phone lines. Basically VoIP networks are designed to do a good job with speech and so faxing over these networks can encounter problems. The real hope is to use a proper FoIP protocol, such as T.38, to achieve consistent reliable faxing across IP networks. 14 Companies like eCopy and omTools provide software that insulates enterprises from the proprietary operation environment of the MFPs. They provide coordination, tracking, and routing of scanned material. 15 For an overview of business process centers of excellence please see the June 20, 2008, “The BPM COE Is Here: Now What?” report. 16 Laws that allow electronic signatures have been enacted all over the world, including the Electronic Signatures in Global and National Commerce Act (ESIGN) in the US; the European Union’s Electronic Signature Directive; the United Nations Convention on the Use of Electronic Communications in International Contracts; the FDIC; state laws; and SEC regulations. For an overview of e-signatures see the May 31, 2006, “E-Sign Here, Please” report. April 27, 2009 © 2009, Forrester research, inc. reproduction Prohibited
  • 24. Best Practices: Customer Onboarding 23 For Business Process & Applications Professionals17 Wells Fargo Funding, a division of Wells Fargo & Company (NYSE: WFC). Loan originators working with Wells Fargo are speeding up the loan origination process by getting disclosure documents signed electronically, thus eliminating the time, expense, and environmental impact of printing and delivering large stacks of paper documents. Source: “Wells Fargo Funding Accepts DocuSign Electronic Signatures for Loan Disclosure Documents,” DocuSign press release, April 2, 2008 (http://www.docusign.com/news_and_ events/press_releases/2008-04-02.php).18 Source: “Fidelity Introduces E-Signature Capability For Independent Advisor Market,” Fidelity news release, August 11, 2008 (http://content.members.fidelity.com/Inside_Fidelity/fullStory/1,,7611,00.html).19 Fidelity used multiple authentication methods including internally maintained credentials, EMC’s RSA technology that provides challenges against publicly available data records and comparison with publicly available databases like the Office of Foreign Assets Control’s (OFACs) list of known terrorists.20 To support its e-signature capability, Fidelity uses DocuSign, a provider of e-signature technology and electronic contract execution services.21 The process supports multiple user authentication methods to identify signers. Jurisdictional rules management deals with the various requirements imposed by special regulations or state rules, especially in consumer consent and disclosure are used.22 The first few weeks and months of a new banking relationship, for example, have proven to be critical in terms of determining the tenure and profitability of that relationship. The challenge for marketers is to immediately leverage their early understanding of new customers to drive relevant and timely communications which foster and support a lasting, growing relationship. See the January 9, 2009, “Trends 2009: Insurance eBusiness And Channel Strategy” report and see the January 21, 2009, “The Economic Necessity Of Customer Service” report.23 Adoption of e-transactions has lagged due to poor alignment between IT and marketing, ineffective incentives for customers, and unprepared IT infrastructures. To review these issues, please see the December 17, 2008, “In Good Times And Bad, Document-Centric Web Transactions Lower Costs And Improve Experience” report.© 2009, Forrester research, inc. reproduction Prohibited April 27, 2009
  • 25. making Leaders Successful Every Day Headquarters Research and Sales Offices Forrester Research, Inc. Australia Israel 400 Technology Square Brazil Japan Cambridge, MA 02139 USA Canada Korea Tel: +1 617.613.6000 Denmark The Netherlands Fax: +1 617.613.5000 France Switzerland Email: forrester@forrester.com Germany United Kingdom Nasdaq symbol: FORR Hong Kong United States www.forrester.com India For a complete list of worldwide locations, visit www.forrester.com/about. For information on hard-copy or electronic reprints, please contact Client Support at +1 866.367.7378, +1 617.613.5730, or clientsupport@forrester.com. We offer quantity discounts and special pricing for academic and nonprofit institutions.Forrester Research, Inc. (Nasdaq: FORR)is an independent research companythat provides pragmatic and forward-thinking advice to global leaders inbusiness and technology. Forresterworks with professionals in 19 key rolesat major companies providingproprietary research, consumer insight,consulting, events, and peer-to-peerexecutive programs. For more than 25years, Forrester has been making IT,marketing, and technology industryleaders successful every day. For moreinformation, visit www.forrester.com. 47060