Cognizant CRM Insights




Value Stream Mapping: Unlocking
What Your Customers Treasure

    By Desiree Soldberg
    Tradi...
ABC Company — Corporate Sales Process
                                                      Current State – November 2009
...
aircraft. A five-minute improvement meant that           Controlling Variability
                   the planes are now rea...
The VSM exercise is not an end in itself; rather, it                                       understand that, you can take a...
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Mapping the CRM Value Stream

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Value Stream Mapping (VSM) is a lean manufacturing concept where you to start with your customers' point of view and create a visual representation of the processes your organization uses to serve its customers. VSM shines a bright light on the top three causes of performance impairment - waste, variability and inflexibility.

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Mapping the CRM Value Stream

  1. 1. Cognizant CRM Insights Value Stream Mapping: Unlocking What Your Customers Treasure By Desiree Soldberg Traditional customer relationship management name implies, involves mapping the processes (CRM) proceeds from the inside of your that make up the customer value stream. This is organization out, aiming for the right mix of different from the exercise of creating the products and services to please customers or traditional process flow diagrams, sometimes prospects. By contrast, value stream mapping called “swimlane” diagrams in that each process (VSM), a lean manufacturing concept, requires is examined from the perspective of whether the that you start with your customers’ point of view customer derives value from it. –– their needs, constraints and desired outcomes. From there, you create a visual representation –– By contrast, value stream maps take traditional a picture, storyboard or map -- of the processes process maps (like the one on the following page) your organization uses to serve its customers. to the next level. VSM looks at the “three m’s” of what you deliver to your customer: Specifically, you begin with what your customers value and trace back through the organization, 1. Movement: Who initiates the process? Do cus- gauging how well your offerings and business tomers “pull” or initiate the process, or does processes align with customer priorities, the organization “push” it to the customer? Is adjusting where necessary. Regardless of it electronic or paper-based, automated or industry, at the end of the day, customers value manual? Who are the active parties, and when the same thing: They want to deliver what their do the handoffs occur? What drives the next customers expect –– quickly, accurately and cost- step in the process? Where are the customer effectively. The closer you come to making your touchpoints? How much movement (physical customers’ priorities your own, the better able and virtual) is involved in getting information you will be to serve their needs, today and and/or goods from one person to another? tomorrow. 2. Method of managing the request: For exam- ple, if a customer makes a service request via VSM grew up in manufacturing, but it can (and the Web site, what is the method for managing should) be applied in any industry to help ensure the work? Is some sort of priority assigned to companies are expending resources in ways that the request? Is it last in, first out? Some other customers value. At a high level, VSM helps scheme? organizations identify the factors that are 3. Metrics: Questions here are production- and holding back performance to target needed operations-oriented. What is your customer improvements. Unearthing these factors, as the service representative’s average workload? CRM Insights
  2. 2. ABC Company — Corporate Sales Process Current State – November 2009 Customer Start Your sales process begins here… Fax Start Customer Service Start Website Start No No Yes Yes Yes Yes Yes Sales No No Executive No Yes Yes No No End And ends here… A traditional process map illustrates processes, whereas a VSM examines processes from the perspective of whether the customer derives value from it. How many customer requests per product to meet customer demand, leading to the day/hour/etc.? How long does it take on aver- need to warehouse inventory or, worse, piling up age to resolve customer requests? What are obsolete stock. your accuracy rates? Excessive motion is another form of waste. We The underlying theme of all these questions: worked with a major airline on mapping the value Does every process add value for the customer? stream of its maintenance organization. When VSM aligns to customer “moments of truth” –– the maintenance process was those critical points that make all the difference probed in depth, we VSM shines a bright light for the customer (the plane landing on time, the discovered there was a lot of on the top three causes of package arriving overnight as scheduled, the excess physical motion, in this performance impairment -- produce that is perfectly fresh). The goal is to case, too much moving from visualize and eliminate waste –– every step (or one side of the plane to the waste, variability and part of a step) that is not a customer moment of other, which did not add any inflexibility, which you will truth, focusing on system and process inhibitors, value to the customer. In that seek to eliminate or reduce and then repeating VSM to continue making same operation, we found that as much as possible. improvements. This is how to drive sustainable office personnel were in some customer value. VSM shines a bright light on the cases sending separate top three causes of performance impairment -- e-mail messages to different individuals, as waste, variability and inflexibility, which you will opposed to creating a distribution list and seek to eliminate or reduce as much as possible. sending the message once, or better yet, posting it on a SharePoint site to avoid having to send it at all. Reducing Waste The elimination of waste is at the heart of lean By making small but significant changes to both thinking, so it is no surprise to see waste the maintenance operation and the business visualization as a prime focus of VSM. Waste offices, the airline gained back precious time. The comes in a variety of flavors. One is use of rolling carts helped maintenance staff overproduction -- you’re producing too much become much more efficient at cycling the CRM Insights 2
  3. 3. aircraft. A five-minute improvement meant that Controlling Variability the planes are now ready for their next takeoffs Variability includes anything that deviates from a much more quickly –– a clear win for passengers standard operating procedure, generating an with no sacrifice in safety. And learning to deal unstable result. It is much easier to control with e-mail more efficiently meant more time for variability in some industries than others. In any office staff to turn their attention to more case, VSM will flag variability. In the airline important pursuits. industry, flight arrival times are highly variable, often due to circumstances beyond the airline’s A classic example of waste is manually re- control. The airline must spend an inordinate entering customer information from one system amount of resources fine-tuning processes so it to another, such as an ERP system and a CRM can maximize its chances for meeting the system. Entering this data customer need to arrive on time. A classic example of twice is not only a waste of time, but it can also introduce waste is manually errors, which is definitely Here, the point of the VSM is to identify and characterize the variability. If you can control it, re-entering customer against customer interests. you should change it. When you can’t control the information from one From the customer’s point of variability, you need to build in enough slack so system to another, such view, it is far better to enter the that the end result to the customer will not be customer information once and as an ERP system and a let it propagate through all the variable. In many industries, it makes sense to create “standard work” in order to reduce CRM system. systems (easier said than variability. done). In our experience, value stream maps are often a visual representation of waste in action –– your indication of processes Identifying Inflexibility that need to be reengineered. Henry Ford’s early vehicles, which “came in any color so long as it’s black” are an archetype of The waste of human intellect is often overlooked inflexibility. That degree of rigidity is a throw-back but no less significant. Our engagement with a to a simpler time and would never fly now. The large company in the high-tech space is a case in fact is, customers today have unique needs. Your point. We uncovered many innovations just by systems and processes must be flexible enough asking employees for their thoughts on how to support each customer’s requirements, many things could be improved (no one had ever of which will conflict with each other. One directly inquired their opinions). If you’re not customer might want to be invoiced on pink listening to your own employees and soliciting paper in a certain format, whereas another their ideas for continuous improvement, you’re customer needs it on yellow paper and in another missing out on an opportunity to leverage their format. The third customer does not care. Your collective intellect. back-end and CRM systems need to allow you to modify the output based on what your customer However, there will always be an element of waste wants, automatically. in a process. Most businesses build in a little slack to meet a customer deadline, If your value stream map shows that you can If your value stream map something that is always meet customer needs only if you intervene important to the customer. We manually, this is a sign of inflexibility (and added shows that you can meet worked with a cargo company cost and cycle time). At the very least, your customer needs only if you that has internal service level systems should be able to meet the requirements intervene manually, this is commitments that are earlier of your largest customers automatically. VSM will a sign of inflexibility (and than the commitment made to point out, often in tortured detail, the instances the customer. This way, if there where your system is inflexible. Without question, added cost and cycle time). is a delay in the process, the it can take a lot of time and money to reengineer company can get ahead of it systems to become more flexible (or implement before the customer is affected. This aspect of new ones altogether). But once you understand “waste” is, therefore, necessary for the company what your customers truly value, you will know if to meet its customer expectations in transporting such an investment is justified. 14 million pounds of mail per year. 3 CRM Insights
  4. 4. The VSM exercise is not an end in itself; rather, it understand that, you can take action to is one important tool in the arsenal used in reengineer processes from their point of view. becoming a customer-centric company. Often, And those actions will drive customer VSM is the first time a company focuses so satisfaction, a better customer experience and intently on its customers and their needs. Value new products that more closely match customer stream mapping will put you in touch with how needs –– of all which yield competitive advantage. your customers perceive value. Once you About the Author Desiree Solberg is a Cognizant business and technology consultant with over 10 years’ experience implementing business process solutions at both mid-size and Fortune 500 companies across multiple industries. She has special expertise in the areas of lean, Six Sigma and project management. Desiree can be reached at Desiree.Solberg@cognizant.com. About Cognizant Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process outsourcing services. Cognizant's single-minded passion is to dedicate our global technology and innovation know-how, our industry expertise and worldwide resources to working together with clients to make their businesses stronger. With over 50 global delivery centers and more than 68,000 employees as of September 30, 2009, we combine a unique onsite/offshore delivery model infused by a distinct culture of customer satisfaction. A member of the NASDAQ-100 Index and S&P 500 Index, Cognizant is a Forbes Global 2000 company and a member of the Fortune 1000 and is ranked among the top information tech- nology companies in BusinessWeek's Hot Growth and Top 50 Performers listings. Start Today For more information on how to drive your business results with Cognizant, contact us at inquiry@cog- nizant.com or visit our website at www.cognizant.com. World Headquarters European Headquarters India Operations Headquarters 500 Frank W. Burr Blvd. Haymarket House #5/535, Old Mahabalipuram Road Teaneck, NJ 07666 USA 28-29 Haymarket Okkiyam Pettai, Thoraipakkam Phone: +1 201 801 0233 London SW1Y 4SP UK Chennai, 600 096 India Fax: +1 201 801 0243 Phone: +44 (0) 20 7321 4888 Phone: +91 (0) 44 4209 6000 Toll Free: +1 888 937 3277 Fax: +44 (0) 20 7321 4890 Fax: +91 (0) 44 4209 6060 Email: inquiry@cognizant.com Email: infouk@cognizant.com Email: inquiryindia@cognizant.com © Copyright 2009, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice. All other trademarks mentioned herein are the property of their respective owners.

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