Building a Customer-Centric Business via Integrated Information Management

• Cognizant 20-20 InsightsBuilding a Customer-Centric BusinessVia Integrated Information ManagementTools and techniques for increasing customer loyalty and lifetimevalue by meeting the needs of today’s more empowered and digitallysavvy consumers. Executive Summary Customers increasingly expect companies to have a much better understanding of them as The way companies must interact with their individuals, as well as more timely apprecia- customers has changed, irrevocably. New com- tion of their specific needs. To satisfy this new munication channels have provided organizations breed of demanding and empowered customers, with unprecedented opportunities that, if tapped companies must have the right processes and carefully, could provide a much-needed edge information available to deliver customized and for dealing with increasingly empowered mobile targeted product and service offerings that keep customers in today’s highly competitive market- them engaged and loyal. The emergence of loca- place. tion-based services offers a tool for combining These emerging customer touchpoints have also customer behavior (historical and predictive) with altered customer expectations and purchasing real-time marketing opportunity. behaviors. For instance, the average response It is not just the external environment that is rate for traditional marketing-led advertis- changing. As the “millennial” generation grows ing is declining quickly1 as consumers increas- in stature (i.e., consumption) and influence in the ingly turn to the always accessible Internet and workplace, their expectations for streamlined trusted social networks for knowledge and advice. processes, intuitive systems and real-time infor- Moreover, data privacy issues are also increasing, mation access must be accommodated. If orga- leading to consumer concerns if not managed nizations do not adequately meet these expec- properly. In addition, with the emergence of new tations, they will find it increasingly difficult to social media channels that enable customers to attract talent and, more important, deliver quality pose questions and voice complaints, companies customer experiences that drive behaviors must be prepared to proactively respond to issues conducive to business success. before they escalate or, failing that, repair the damage to their brand equity. cognizant 20-20 insights | june 2012

As a result, companies must reinvent their cus- policies. The Health Information Technology fortomer-centric business processes to ensure better Economic and Clinical Health (HITECH) Act intargeting and revenue generation. Improved the U.S. healthcare industry4 and the Basel IIIcustomer insight is, therefore, critical to ensuring compliance standards and Foreign Account Taxthat the needs of today’s younger, more social Compliance Act (FATCA) for the global bankingand mobile consumer are met. industry are just two examples.This whitepaper lays out the tools and techniques Business agility today is seen as a necessary stepfor transcending the rhetoric and helping to increasing the bottom line. This is evidencedcompanies embrace true customer-centricity. by organizations investing in on-demand servicesIt provides actionable recommendations for and cloud-based solutions to increase IT agility,building an integrated architecture that spans reduce time-to-market and enhance profitability.customer touchpoints, automates key businessprocesses and delivers a single version of the These investments, applied across business lines,truth that can result in substantial increases provide organizations with the power to competein customer lifetime value. Finally, we offer a in the market. However, many companies stilltangible example from the retail banking industry lack the much-needed edge to grab a bigger slicethat demonstrates how specific processes can be of the pie in today’s hyper-competitive globaltransformed to become more customer-centric. marketplace. Increasingly, organizations are realizing that to achieve top-line growth, theyThe Changing Ecosystem need to increase the lifetime value (LTV) of theirThere has been significant and ongoing change customers.in the global market and consumer landscapes. First Step Toward Customer CentricityIncumbent players across industries arestruggling to protect their margins in the face of To successfully transition from a product-centricever-increasing competition. This has resulted architecture to a customer-centric business, orga-in a tremendous need for business model and nizations must first identify their key objectives.process change. For example, merger and acquisi- This will ensure expectation setting and thetion activity is increasing as companies seek to necessary business buy-in, which are crucial forconsolidate with the competition, expand their any IT-focused transformational exercise.global presence or expand their offerings. For instance, depending on the circumstances forFor example, pharmacy benefits manager change, some organizations we have worked withExpress Script’s push to merge with prescription have highlighted the following objectives whenmanagement and health information firm Medco embarking on a customer-centric journey:highlights ongoing consolidation efforts withinthe healthcare industry.2 The healthcare merger • Realize a “one-organization” structure following M&A activity. Use of unified, enterprise-and acquisition market in 2011 generated 980 wide customer information is a step towarddeals worth $227.4 billion, an increase of 9% over realizing this goal.2010.3 • Align marketing strategy and sales force effortMany industries are additionally facing regulatory with client needs and expectations.changes with stricter norms and complianceKey Challenges and Consequences of the Changing Ecosystem CEO Challenges: 2011-2012 CEO Challenges: 2012-2013 g • Identify growth areas in volatile economy • Understand the customer is boss U • Cut operation costs and must be treated like that • Reduce cost via greater efficiency Shift in Att • Attract new customers and expand • Source fresh capital Focus into global markets nto • Ensure regulatory compliance • Keep up with changing technology • Embrace social media • Ensure regulatory complianceFigure 1 cognizant 20-20 insights 2

• Enhance customer experience through system, and it would be impractical to put CRM channel integration, faster request resolution everywhere. However, a comprehensive customer and need-based offerings. management solution should encompass more than just the CRM system; it needs to incorpo- • Identify and utilize cross-selling and up-selling rate other inter-related components, including opportunities, improved customer intelligence, business process management (BPM) and master targeted marketing and better response rate data management (MDM). BPM helps with process per dollar of advertising revenue spent. automation, while MDM ensures that a complete, • Improve operational efficiency and transpar- 360-degree view of important data domains, ency using end-to-end monitoring and process such as customer, product, etc., is available to all automation. concerned parties. • Optimizeservice through multiple channels This combined solution approach helps organiza- and by addressing customer preferences. tions gain valuable insights into customer require- • Create a strategic business and IT architec- ments across the entire organization and various ture to manage risk and quickly adapt to ever- touchpoints, giving them an edge over their com- changing regulatory compliance requirements. petitors. (These concepts are further defined and explained in subsequent sections.) While customer centricity remains the primary focus, other important considerations also play a Solution Components role when considering a transformational project. They include: To achieve customer centricity, organizations need to consider implementing the following: • Evaluating the return on investment on technology dollars spent. • A unified and enriched user experience through an enhanced customer interaction • Leveraging existing solutions before making platform: buy vs. build decisions. • Rationalize and simplify the system >> Contemporary user interface technologies and consolidated information to provide a architecture. superior customer experience via both self- • Use agile frameworks, modern technology and service portals and interactions with cus- cloud-based solutions and invest in open and tomer service representatives. easily upgraded IT solutions. >> A single platform across all service envi- Business Transformation Through ronments to deliver 360-degree insights to Focused IT Strategies sales, marketing and customer service. For organizations to be customer-centric, they >> Closed-loop marketing, starting from cam- need a clear long-term strategic view of the paign design, launch, feedback collection, customer. Organizations should evaluate their sales planning and enablement, through existing business processes and metrics and campaign result analysis. develop organizational abilitiesOrganizations cannot to proactively understand how >> Real-time and effective decision-making and marketing strategy formulation, based manage a complex the customerwill enable them to evolved. This relationship has on data analytics.customer relationship offer customized products and >> Consistency among customer channels, in- without smooth services that positively motivate cluding the various social media platforms. integration among the customer and increase customer LTV. • End-to-end front-office to back-office integration: various business functions such as Customer centricity is not just >> Unifiedsales and multi-channel-enabled a front-office activity. Organiza- customer service platform. finance, legal, supply tions cannot manage a complex >> Seamless BPM across vertical functions. chain, etc. customer relationship without a smooth integration among >> Operational efficiencies by automating and various business functions such as finance, legal, optimizing business processes. supply chain, etc. Not all of these functions have >> Visibility of business process performance, a customer relationship management (CRM) status monitoring and alerts. cognizant 20-20 insights 3

• Realizing a “single-organization“ vision available channels so that the customer sees through enterprise information management: a harmonious and reliable “face” of the organization. >> Seamless exchange of data (customer, product, account) between processes and • BPM: The BPM layer facilitates orchestration systems. of business processes for different functional domains within the enterprise. Some of the key >> Multichannel integration capabilities. benefits of this layer include increased respon- >> Single customer view across lines of busi- siveness of IT to business process changes and ness (LOBs) and applications with one ver- enhanced productivity through automated sion of the truth (i.e., MDM). process execution. BPM also provides opera- >> Customer lifecycle management. tional flexibility, enabling rapid deployment of business change and better monitoring of >> Effective risk and exposure management business effectiveness. by aggregation, hierarchy and relationship mapping. • MDM: To enable users to realize the full benefits of an automated solution, a complete• Common processes and functions across 360-degree view of customers, products and products and LOBs: other key entities is required. MDM helps >> Common business and data services. provide a centralized database with a single version of the truth. Armed with key customer >> Workflow and business rule automation. insights across interaction channels, the orga-The Unifying Advantage nization can fully understand customer needs,A unified solution helps reduce or remove bot- which helps it transition its processes fromtlenecks in the process flow. Some of the key product-centric to customer-centric. MDMadvantages of each component of this solution also enables more targeted and personalizedinclude: marketing, sales and service offerings through the customer’s preferred channels.• CRM: The CRM solution acts as the custom- Customer centricity can be realized through an er-facing infrastructure, providing multiple integrated architecture that combines CRM, BPM touchpoints to address all customer interac- and MDM disciplines, resulting in a seamless and tions across all possible platforms. Along with optimized customer management process (see process optimization, care must be taken to Figures 2 and 3). ensure a consistent experience across allPillars of Customer Centricity CRM BPM MDM • Targeted promotions and e-mail • Process automation • Centralized data acquisition communications • Centralized process logic • Data cleansing, standardization • Sales campaigns • Process optimization and distribution • Send e-mail and track responses • Enterprise-wide and beyond • Data model and persistence • Sales force automation collaboration • Match and merge • Customer tracking • Providing real-time process • De-duplication and • Customer history visibility survivorship • Appointment management • Automation and exception-based • Cross-reference and hierarchy processing management • Time management • Reporting • Rule-based workflow • Data consolidation, harmoniza- management tion, alignment and enrichment • Business activity monitoring • Data stewardship and • SLA tracking and process governance analysis • Security and entitlement • Event management and management notificationFigure 2 cognizant 20-20 insights 4

Integrated Process Architecture Delivering Customer Centricity Relationship Web Mobile In-Store Meetings & Branch Mail Contact Center Marketing Self-Service Marketing Interactions Forums CRM Campaign Lead Service Request Loyalty Case Real-Time Management Management Management Management Management Analytics Multi-Channel Interaction Management Third-Party ID and Application Forms Service Request Decisioning & Service Level Credit Check Origination & Management Underwriting Qualification Approvals & Payments & Notification Notification Verification Application Enrollment Eligibility & Processing Fulfillment Fulfillment BPM Dynamic Product Alert & - Business Process Orchestration & Automation Single Customer 360-Degree Hierarchy & Product Portfolio Risk & Exposure View Customer Insight Relationship MDM Classification & 360-Degree View 360-Degree View Data Security KYC & AML Segmentation of Product of Interaction & Privacy Centralized Data Strategy & Multichannel IntegrationFigure 3The Unified View system, to generate a list of suitable products with applicable rates.The power of the unified solution can bevisualized through a redesigned account opening The relationship manager then uses the completeprocess (see Figure 4). The process begins with view of the customer provided by the MDMthe relationship manager using CRM to capture system, linked to BPM and CRM, to complete thekey customer needs stored in the system. The application. The MDM system also helps obtainintegrated approach relies on automated BPM the complete credit history and other informationsoftware, built on a rigorous decision-based required for processing. This expedites accountIntegrated Solution View Decisioning 360-Degree Client - RM System Insight Operations RM captures client Displays all eligible • RM fills out application Reviews application needs and transmits to product offers with based on 360-degree client view. and determines decisioning system. accurate rates. • Provides credit offer based document needs. on full client relationship. Workflow System CRM • Displays real-time BPM application status. • Routes document MDM automatically to the right person. Operations Client - RM Operations Client - RM • Client signs the • RM receives approval status. • Reviews application • Views application document online. • Sets closing date. and documents. status online. • Document automatically • Client reviews the • Updates workflow • Sends all documents routed for processing. application. with approval status. required online.Figure 4 cognizant 20-20 insights 5

opening processing time and reduces manual • BPM checks to see if the applicant is an existingdata entry. The completed form is automatically customer, updates additional informationrouted to all concerned parties through process required, gets the basic know-your-customerautomation, achieved via BPM. The client is able (KYC) checks verified, defines the eligibleto view her current status online and provide an product and arranges for customer accountelectronic signature. creation.The signed form is then sent to the operations • MDM supports both CRM and BPM by checking data repositories to determine whether theteam for final processing. Complete automation applicant is an existing customer and thenand transparency is achieved using the combina- creates or updates the customer record,tion of the CRM, BPM and MDM systems working assigns a customer ID and stores informationtogether to provide a seamless process flow. on the products mapped with the customer ID.Key Processes Leveraging Customer Service Request Processingthe Unified Solution The process starts with the request reaching theFrom here, we will examine four critical customer customer service department and finishes whenmanagement business processes. the request is completed and updated in the customer master file (see Figure 6, next page).Customer Onboarding in RetailBanking Operations • CRM handles the customer service request,Let’s examine the customer on-boarding process captures additional information for authentica-for a typical retail bank (see Figure 5). The process tion and service activation, generates a serviceis initiated when an application for a particular request ID, manages turnaround time andproduct is received at the point of sale and is updates the customer on service status.terminated when the applicant is either denied orconverted into a customer. Here’s how our three • BPM sends the request for authentication, determines whether fees or charges arecritical components should be applied: required, sends the service request ID to• CRM receives the application, collects and operations for fulfillment and notifies the rela- captures all the necessary information, tionship manager for service completion. MDM prompts the customer to choose a product and ensures whether the customer is genuine, provides the welcome information and relevant identifies the customer segment or group and collateral. updates the customer service portfolio.Customer Onboarding in Retail Banking Operations Capture additional Select Send welcome Receive customer Receive customer information for product/service letter/collateral/ CRM info/application info/application authentication requirement service confirmation Check if existing Send for KYC Send for account Send for verification creation/ID number BPM customer creating/updating TPP Is product asset/liability generation Send for due or TPP? Asset diligence Liability Compliance Update KYC Is customer N Risk & eligible (credit score)? Y Product System Map branch ID Map assset ID Map investment to customer to customer product N N MDM Y Create/update Is customer Y Create and store bank Is customer Create customer ID customer information KYC compliant? account/loan account/CC existing ? number/invoiceFigure 5 cognizant 20-20 insights 6

Customer Service Request Processing Call center Captures Capture additional Inform customer of Mail/text completion CRM Create service (branch) executive information for information/documents charges/TAT and request ID update to customer via receives request authentication for service take confirmation preferred contact mode Send service completion BPM Send for Send to check Send request ID alert to relationship verification fees/charges to operations manager/CC Repository Product/ Service Check appropriate charge for segment Processing Operations Add charges to current and Process service bucket statement MDM N Y Check interaction history Is customer Check customer Check preferred Update customer (to see if service request segment mode of contact service portfolio genuine? exists in history)Figure 6Loyalty Management with updates made to the customer’s master fileThe process begins with the identification of (see Figure 8, next page).customers who can be offered loyalty benefits • CRM runs the campaign on the selected set of(using MDM) and terminates after communicating customers, manages the response, interactsthe loyalty reward structure to customers from with customers and notifies them about newCRM and updating them in the MDM customer products or services.master database (see Figure 7, next page). • BPM manages and designs the campaign, transfers leads to the sales team and archives• CRM communicates eligibility norms to prospective leads. the customer for loyalty benefits, notifies customers about their loyalty group and • MDM provides the customer data for the provides collateral and product/service campaign, obtains segmentation information, offerings, based on loyalty. targets a set of customer data and forwards this data to analytics for monitoring and measuring• BPM maintains qualification standards, loyalty of the campaign’s success. MDM also updates segmentation, mapping of customers within the outcome of the campaign in terms of the loyalty reward structure and updating new products or services in the customer’s the CRM system and sales team on customer master file. activities following loyalty structure mapping.• MDM contains all the customer information, Key Benefits which it sends to BPM for segmentation, Processes implemented using the proposed providing a 360-degree view of customers to solution will promote the re-use of data services help create customer loyalty segments, updates and improve overall data quality, while providing the customer master database with the loyalty business stakeholders with a full view of the code and loads the customer’s master file with customer, enabling the organization to serve products and services made available after the customers better. It will also promote business customer is awarded loyalty status. process governance and ensure consistency of data in a multi-system environment. The resultCampaign Management has the potential to drive much higher LTV withThe process is initiated from the data extracted at increased up-sell and cross-sell opportunities,the MDM level and ends at the MDM level, again thereby improving top-line growth. cognizant 20-20 insights 7

Loyalty Management Communicate loyalty Welcome letter to CRM New offerings based on structures and loyalty club and benefit loyalty to customers associated benefits structure notified N Send for loyalty Customer mapped Update CRM on Update sales BPM Does the Update customer segmentation customer with loyalty and loyalty code and team on loyalty activities post qualify? reward structure notify customer structure loyalty structure Y Analytics Analytics Create customer rule engine loyalty structure Marketing Sales and Sales and marketing creates offerings based on loyalty structure MDM Create Update customer Update customer master with Active customer 360-degree view of master with additional product and service information codes post loyalty structure customer loyalty codeFigure 7Campaign Management Initial CRM Run Customer Update Welcome call for campaign response interaction customer new services received BPM Design Approve Transfer leads Transfer Archive Notify campaign campaign to analytics leads to sales leads customer Analytics Analyze Create target Monitor and analyze Archive leads for customer data groups campaign success further analytics N Marketing Sales and Leads Lead Sales Active Define goals and qualification objectives assigned Y cycle customer MDM Customer Get segmentation Target set of Update customer data information customer data masterFigure 8 cognizant 20-20 insights 8

Raising the Bar on Customer The unified business transformation solutionLifetime Value outlined above can help organizations achieve this customer-centric view. It will help optimize andIn today’s rapidly changing environment, organi- automate processes toward a “one-organization”zations are looking for ways to remain competi- view across all channels to achieve a more precisetive, regain traction, enter and expand into new and intimate understanding of the customer. Withmarkets and tap all available opportunities. These the combined use of CRM, BPM and MDM, organi-organizations can benefit significantly by moving zations can enhance their value to the customerfrom a product-centric to a customer-centric by effectively understanding customer needs andapproach. mitigating customer issues, resulting in increased loyalty, enhanced brand reputation and greater lifetime value per customer.Footnotes1 The CMO Survey.Org, February 2012, http://www.cmosurvey.org/.2 Drew Armstrong and Sara Forden, “Express Scripts, Medco Win Approval for $29 Billion Deal,” Bloomberg Businessweek, April 2, 2012, http://www.businessweek.com/news/2012-04-02/express-scripts-medco-win- approval-for-29-billion-deal.3 “Healthcare M&A Finishes Strong in 2011,” The Advisory Board Co., Jan. 26, 2012, http://www.advisory.com/Daily-Briefing/2012/01/26/Merger-and-acquisition-activity.4 “HiTech Act,” HIPAA Survival Guide, http://www.hipaasurvivalguide.com/hitech-act-text.php.About the AuthorsSouparna Giri is Lead Consultant in Cognizant’s MDM Advisory Service, with eight-plus years of experiencein the IT field. Souparna has a bachelor’s degree in mechanical engineering from Bengal EngineeringCollege and an MBA in marketing from Great Lakes Institute of Management. His expertise spans MDMstrategy, assessment and roadmap. He can be reached at Souparna.Giri@cognizant.com.Karmendra Jain is a Business Consultant with Cognizant’s MDM Practice. Karmendra has a bachelor’sdegree in computer science from The National Institute of Engineering and an MBA in strategy and ITfrom the Indian Institute of Management, Calcutta. He can be reached at Karmendra.Jain@cognizant.com.About CognizantCognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process out-sourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered inTeaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industryand business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50delivery centers worldwide and approximately 140,500 employees as of March 31, 2012, Cognizant is a member of theNASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performingand fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant. World Headquarters European Headquarters India Operations Headquarters 500 Frank W. Burr Blvd. 1 Kingdom Street #5/535, Old Mahabalipuram Road Teaneck, NJ 07666 USA Paddington Central Okkiyam Pettai, Thoraipakkam Phone: +1 201 801 0233 London W2 6BD Chennai, 600 096 India Fax: +1 201 801 0243 Phone: +44 (0) 20 7297 7600 Phone: +91 (0) 44 4209 6000 Toll Free: +1 888 937 3277 Fax: +44 (0) 20 7121 0102 Fax: +91 (0) 44 4209 6060 Email: inquiry@cognizant.com Email: infouk@cognizant.com Email: inquiryindia@cognizant.com© Copyright 2012, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by anymeans, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein issubject to change without notice. All other trademarks mentioned herein are the property of their respective owners.

Building a Customer-Centric Business via Integrated Information Management

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