Crmbsc

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Crmbsc

  1. 1. Subbaraman Iyer Ennovate Solutions
  2. 2. 1 CRM – Coming a full circle ! 2 CRM Renaissance 3 Using the Balanced Scorecard 4 CRM Deployment 5 Case StudySubbaraman Iyer Ennovate Solutions
  3. 3. Subbaraman Iyer Ennovate Solutions
  4. 4. The Hype Cycle! § Over 65% of companies expect CRM to increase sales revenue by more than 10% -- Analyst report § CRM performance accounts for 28% to Idea Cult Popular 60% variance in company performance Chasm Acclaim – Research report (July 2001) Concept Early Integration Prototypes è “Do something” or be “Amazoned” è Built on HYPE and FEAR and more often “bumper sticker” justification è Still using the concept of the 1980s to justify investment – Costs 6 times to win a customer than to retain one – 10% spike in repeat customers would add 10% to the bottom line è Technology seen as a quick-fix solutionSubbaraman Iyer Ennovate Solutions
  5. 5. Reality Stuck! § Redundant spending will cost Global 2000 companies a total of between US$3 and US$4 billion over the next two years - Jupiter § Research of 200 CRM projects in the US last year found 30 % delivered no return to the business - Management Information Principles Tragedy of misguided intentions !! Confusion § Study identified that in 32 percent of sales technology projects, little or no use was made of the technology 12 months after deployment – Deployment, Gartner Change Management § Misalignment between actual performance and the promised returns hyped up by vendors - Frost & SullivanSubbaraman Iyer Ennovate Solutions
  6. 6. Measurement challenges ! Permission MarketingPermission Marketing Seth Godin Seth Godin Customer IntimacyCustomer Intimacy Fred Wiersama Fred Wiersama Real-time MarketingReal-time Marketing Regis McKenna Regis McKenna Continuous Relnship MarketingContinuous Relnship Marketing McKinsey McKinsey è Only 11% of CRM implementation claim to have Over 80% cite very positive ROI organizational and è More than two third of the adoption challenges to CRM implementation are not successful measurement Source : Jupiter mediametrix Sept 2001 Subbaraman Iyer Ennovate Solutions
  7. 7. Why CRM Implementation fails? Emotional Justification Why blame failure on the tool when Process CRM Mindset Failures and technology is only an enabler ! Optimization Skepticism issues Technology Deployment Results: è “Returns by early adopters of CRM has been minimal or non-existent. è “Me-too” copycats made decisions on faith è Businesses are reticent to talk of failure, yet when we are looking for return, it is just not there!Subbaraman Iyer Ennovate Solutions
  8. 8. Where Are We Now? WE ARE HERE! $$ Idea Cult Popular Confusion Chasm Acclaim Chasm RealityConcept Early Integration Deployment, Renaissance Prototypes Change Management Subbaraman Iyer Ennovate Solutions
  9. 9. Subbaraman Iyer Ennovate Solutions
  10. 10. And the approach is getting different ! In The Past … … In The Future Align strategy, process, Implement Technology technology and people Justification based on faith Logical framework Interaction/channel Analytical and Business functionality Intelligence Local optimization Process Integration Incremental and learning “Big Bang” approach approachSubbaraman Iyer Ennovate Solutions
  11. 11. For CRM to be successful, CRM For CRM to be successful, CRM initiatives must be ALIGNED with initiatives must be ALIGNED with corporate goals and vision and corporate goals and vision and EXECUTED systematically in a step by EXECUTED systematically in a step by step approach step approach The Balanced Scorecard (Kaplan and Norton) is an EXCELLENT TOOL not only for strategy implementation but also performance management.Subbaraman Iyer Ennovate Solutions
  12. 12. Subbaraman Iyer Ennovate Solutions
  13. 13. Four Processes to Manage Strategy Articulating the Vision § Clarifying § Consensus § Commitment Linking the Feedback Vision § Setting goals § Review § Performance BALANCED § Tracking § Compensation § Change SCORECARD Management Business Planning § Setting specific targets § Aligning initiatives § Allocating resources § Establishing milestonesSubbaraman Iyer Ennovate Solutions
  14. 14. How Do You Measure Strategy? VISION The Balanced Scorecard converts strategy into an “To satisfy our SCORECARD integrated system of shareholders, Objectives Measures Targets Initiatives objectives, measures, targets,Financial what financial Profitability and initiatives defined across objectives must Growth we accomplish?” Shareholder Value four business perspectives SCORECARD “To achieve our Objectives Measures Targets Initiatives financial Customer objectives, what Image customer needs Service must we serve?” Price/Cost “To satisfy our SCORECARD customers & Objectives Measures Targets Initiatives shareholders, Internal/Process which internal Cycle Time Quality processes must Productivity we excel?” SCORECARD “To achieve our Objectives Measures Targets Initiatives goals, how must Learning and Growth our organization Mkt Innov. learn and Cont. Learn innovate?” Intellectual AssetsSubbaraman Iyer Ennovate Solutions
  15. 15. Commit to a Future Direction From Strategy to CRM Drivers Mission & Strategy Balanced Scorecard Learning & Financial Customer Internal Process Growth 1.1 Profitability 2.1 Image 3.1 Cycle Time 4.1 Mkt Innovation 1.2 Growth 2.2 Service 3.2 Quality 4.2 Cont. Learning 1.3 Shareholder 2.3 Price / Cost 3.3 Productivity 4.3 Intellectual Desired Value Assets Outcomes CRM Business Case and ROI ModelSubbaraman Iyer Ennovate Solutions
  16. 16. Subbaraman Iyer Ennovate Solutions
  17. 17. Learning & Financial Customer Internal Process Growth1.1 Profitability 2.1 Image 3.1 Cycle Time 4.1 Mkt Innovation 1.2 Growth 2.2 Service 3.2 Quality 4.2 Cont. Learning 1.3 Shareholder 2.3 Price / Cost 3.3 Productivity 4.3 Intellectual Value Assets CRM Business Drivers Visioning Defining Assessment From BSC to CRM Gap Analysis Blue Print Required Execution InvestmentSubbaraman Iyer Ennovate Solutions
  18. 18. These analytics often don’t exist n nLTV = å (Ry - Cy) max LTV = å ( max Ry - min Cy) (1+r)y y=0 (1+r)y y=0 è LTV is driven by 3 variables § Tenure (n),Lifetime Value § Revenue (R) § Cost (C) è Difference between LTV and maximum LTV is Potential è Getting a strategy for realizing Time maximum customer potential, by maximizing tenure and minimizing cost is the challenge Subbaraman Iyer Ennovate Solutions
  19. 19. What we measure is important, but what we don’t.. is critical ! Emotional § Emotional alignment § Advocates § Is forgiving § Can’t buy them over R e s Rational § Rational Alignment § Transactional p § Tenuous § Negotiable § Ruled by the“heart” o n s § Ruled by Transactional § Functional attributes the“head” e § Performance attributes § Ruled by the purse Satisfaction Loyalty FidelitySubbaraman Iyer Ennovate Solutions
  20. 20. Subbaraman Iyer Ennovate Solutions
  21. 21. This case study highlights how a Telco translate its strategy into scorecards and map them to CRM Drivers • Industry Background • Strategy Map – Consumers’ Preference – How the CRM goals and – Chasm Indicator business case was conceived – Challenges – How CRM goals were • Competition congruent to the BSC • Trends metrics – How the CRM business case is translated into implementation blue printSubbaraman Iyer Ennovate Solutions
  22. 22. Key Success Factors Case Study: The scorecard Telco FINANCIAL Vision #1 Return on Capital Employed“Major Telco #2 Profitability #3 Growth and Cash flowin Asia Pacific” CUSTOMER FINANCIAL #1 More Value for Money ROCE Gross MarginStrategy #2 Best in customer service #3 Meets everyone’s needs New Product CUSTOMER• Service as a Rev (%) Vol Indicators differentiator #4 Quick deployment Cust Cust Acquisition/ Perception Retention• To deliver PROCESS Product Attractive- ness External “tailored Ranking service #1 New Service rollouts bundles” to #2 Internal / External SLA Product ensure Development #3 Cycle time (cash realisation) Cycle Sales Effectiveness customer #4 Change management Product satisfaction Milestone Effectiveness Operations Costs• To ensure DEVELOPMENT Suggestions maximum New Product Implement- ation PROCESS #1 Staff morale Introduction network #2 Motivated staff coverage Technical Staff Attitudes #3 Staff productivity Skills DEVELOPMENTSubbaraman Iyer Ennovate Solutions
  23. 23. Translate Vision to Strategy Vision To be the leading Telco providing wide range of innovative services STRATEGY § Service as a differentiator § Best network coverage § Tailored service bundles Scorecard Scorecard Scorecard ScorecardSubbaraman Iyer Ennovate Solutions
  24. 24. Convert Strategy to Scorecards’ ObjectivesTo be the leading Telco providingwide range of innovative services Vision § Service as a differentiator § Best network coverage Strategy § Tailored service bundles FINANCIAL CUSTOMER PROCESS DEVELOPMENT R.O.C.E. Value for money Service Rollout Staff Motivation Profitability Best Customer SLA (internal Staff Services and external) Productivity Growth & Cash Meet Functional Cycle Time Staff flow Needs Satisfaction Quick Deploy Change Management Subbaraman Iyer Ennovate Solutions
  25. 25. Strategy Map Vision Business Goal iv e Improve Customer rat Services to drive st Ill u profitability Strategy improvement FINANCIAL CUSTOMER PROCESS DEVELOPMENT R.O.C.E. Value for money Service Rollout Staff Motivation Profitability Best Customer Best Customer SLA (internal and Staff Profitability Services Services external) Staff Productivity ProductivityGrowth & Cash flow Meet Functional Cycle Time Staff Staff Satisfaction Needs Satisfaction Quick Deploy Change ManagementSubbaraman Iyer Ennovate Solutions
  26. 26. Linking Scorecard Objectives to GOALS! Vision Business Goal Provide tailored and structured Strategy value bundles FINANCIAL CUSTOMER PROCESS DEVELOPMENT R.O.C.E. Value for money Value for money Service Rollout Service Rollout Staff Motivation Staff Motivation Profitability Best Customer SLA (internal and Staff Productivity Services external)Growthflow CashGrowth Cash flow & & Meet Functional Needs Cycle Time Staff Staff Satisfaction Satisfaction Quick Deploy Change ManagementSubbaraman Iyer Ennovate Solutions
  27. 27. Linking Scorecard Objectives to GOALS! Vision Business Goal Improve Service Quality & Strategy Reliability FINANCIAL CUSTOMER PROCESS DEVELOPMENT R.O.C.E. Value for money Service Rollout Staff Motivation Staff Motivation Profitability Best Customer Best Customer SLA (internal SLA (internal and Profitability Services Services and external) external) Staff ProductivityGrowthflow CashGrowth Cash flow & & Meet Functional Meet Functional Needs Needs Cycle Time Staff Satisfaction Quick Deploy Change ManagementSubbaraman Iyer Ennovate Solutions
  28. 28. Linking Scorecard Objectives to GOALS! Vision Business Goal Introduce New Services and meet Strategy competition FINANCIAL CUSTOMER PROCESS DEVELOPMENT R.O.C.E. R.O.C.E. Value for money Service Rollout Staff Motivation Best Customer SLA (internal and Staff Profitability Services external) Staff Productivity ProductivityGrowth & Cash flow Meet Functional Cycle Time Cycle Time Staff Satisfaction Needs Quick Deploy Quick Deploy Change ManagementSubbaraman Iyer Ennovate Solutions
  29. 29. nd Scorecard ––22ndlevel Scorecard level Detailed Strategy Map of Detail of Detail FINANCIAL CUSTOMER PROCESS DEVELOPMENTR.O.C.E. Value for money Service Rollout Staff Motivation • Outsource • Create Svc Bundle • Introduce Bundle • Motivation Index • Increase ARPU • Increase Retention • Support Readiness • VOC Score • Target Cust SegmentProfitability Best Cust Services Service Level Agr Staff Productivity • Improve Gross Margin • Increase F.C.R. • Internal Governance • Productivity Index • Reduce Staff costs • Improve Svc Quality • Vendor Accountability • Training • Cross-Fx ExperienceGrowth & Cashflow Meet Fx Needs Cycle Time Staff Satisfaction • á high value segment • Increase VAS • Delivery2Cash Cycle • Achievements • á prepaid • Compare Quick & Act • Business Delay Cycle • Recognition • Reduce DSO • Cash Realization • Compens & Benefits Quick Deploy Change Mgmt • Specific Cust Request • Project Mgmt • Content & Service Prov • Risk Assessment • Implementing initiativesSubbaraman Iyer Ennovate Solutions
  30. 30. CRM Business case • Improving Customer service -- # 1 priority – Improving FCR from current 55% to industry standard > 90% – Reducing customer service costs by 20% • Reducing churn in M, M-H and High segment – Proactively anticipating churn and contract renewal rates by 20% – Save the customer program (win back selective customers) • Gain market share for prepaid with reduced churn – Create more attractive service-price bundles – Reduce campaign management costs by 25% • Functional benefits to M, M-H and H segment (postpaid) – Improve cross-sell and up-sell ratios by 30% – Reduce marketing costs by 15%Subbaraman Iyer Ennovate Solutions
  31. 31. CRM initiatives Customer Service Despite a projected 13% increase in customer contacts, Improvement at 90 % FCR level, customer satisfaction was expected impact to increase by 4%, reducing costs by 8% Key Actions taken: §Detailed metrics tracking (operational to financial metrics) §SLA revised internally with Billing, Network operations, Distribution network §Staff training, revised and different compensation model proposed §Call centre overhauled, with new set of CTI / IVR applications to reduce calls Overall Impact: §Process re-design, workflow management §CRM software customized to increase greater customer visibilityEmp sat score : + Major ChallengesCust sat score : same •Process redesign and implementation •Administering the SLA internallyFin ROI(annual): 34% •People skills, training and motivation •Co-ordination mechanisms •Projecting the impact on customer sat •Communicating metrics and impact •CRM customisation and CTI applications •Raising profile of Customer service Results: qCustomer contacts increased by 19% (expected 13%) qFCR moved from 55% to 82% (targeted 90%) qCustomer satisfaction – No change qCost reduction of customer service – 7% (expected 8%) Subbaraman Iyer Ennovate Solutions
  32. 32. Conclusion • The BSC helped articulate strategy and improve alignment – Developing the lead and lag indicators was a challenge – Cascading the scorecard and developing ownership took time • CRM goals got better agreement and commitment – Software functionality was less of an issue – Process and people challenges were more difficult issues • Investment in Analytic CRM proved beneficial – Modeling and simulation helped get a better perspective – Understanding segmentation and relationship drivers • Linking metrics back to BSC helped get executive support • The journey just started.. It’s still a long way to go !Subbaraman Iyer Ennovate Solutions

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