CRM: beyond technology
Although CRM was supposed to transform business, its impact
in India has been mixed. Lets look at how CRM can help the Indian enterprise
and how CIOs can craft an enterprise-wide strategy to get the most out of these
solutions. by Soutiman Das Gupta
Much has been written about customer relationship management (CRM). It has
been called a strategic tool that combines business processes, technology, employees
and information across an enterprise to attract and retain profitable customers.
Despite this, the jury is still out on whether CRM has fulfilled its promises.
Banks and telcos still create silos of information with little scope for sharing
information. All of us have received unsolicited calls and mail from financial
companies and telcos asking us to buy products that we dont need and sometimes
Companies, especially those focussed on retail such as banks, insurance providers
and telcos, have suffered because of a lack of understanding of their clientele
in terms of behaviour, spending patterns, needs, and causes of dissatisfaction.
Rivals, sometimes even fledgling organisations with better planned systems and
processes, have grabbed some of their customers.
Has CRM in India been reduced to an empty buzzword thats tossed around
so that a company appears to be keeping up with the industry? Not entirely,
because organisations like Standard Chartered Bank, ICICI Lombard, BPL Telecom
and Air-India have successfully used these toolsand benefited. The difference
lies in the way CRM has been deployed at these organisations. It is a combination
of technology and process change that has worked.
We will explore the answers to the knotty question of what makes one company
successful and the other fail to get substantial returns from a CRM initiative
in this issues cover stories.
The mantra for CRM success
For companies that use CRM and those that plan to, it is important to understand
that CRM technology has developed, evolved and matured over the years. It is
now a reliable process that combines business and technology to power a customer-focussed
To create successful customer-centric organisations, CIOs and even CEOs are
asked to repeat this mantra: CRM is a business initiative and is not about
Three months is about how long it takes on the average
to learn from others successes and then create a set of policies
and guidelines for an organisation
CRM is a management strategy that enables an organisation to become customer-focussed
and develop stronger relationships with its clientele. It helps piece together
information about customers, sales, marketing effectiveness, responsiveness
and market trends.
Technology can play a significant role in CRM being an enabler, but thinking
about CRM solely in technological terms is wrong. It is not about solving a
technology problem, it is a process that aligns your business around your customers
needs. Software is only one component of this process.
Explains Krishna Kumar, Head of Technology Management at
iSeva Systems, a BPO services firm, The role of technology in CRM strategy
is part-evangelism and part-procedural. Technology assists the cause by facilitating
customer interaction and transaction management, and at the same time helps
set up processes that result in more efficiency and effectiveness in customer-facing
In the next article we will cover the ways in which a company can get to know
and understand its customers, and get optimum returns from a CRM initiative;
we will also take a look at the reasons why CRM initiatives fail.
Before we get there, let us look at what CRM means to an enterprise and the
scope of the various types of CRM.
To create a CRM strategy in your
organisation, the CIO needs to understand what CRM can do, and ask why
he needs to be customer-centric Frederic Moraillon,
Director, Marketing, Business Objects, APAC
Know thy CRM
How many CEOs will deny that they need to understand their customers better
in order to survive in the marketplace and stay profitable?
Despite deploying CRM tools companies may fail to exploit the business potential
of the customer pool. When this happens technology leaders and business leaders
blame each other or a sluggish market.
Since CRM is about business and not technology, it is imperative to know your
customer to grow your business. To do that you must know what CRM can really
do for you.
Operational CRM is the customer-facing application of CRM and is like
the ERP of CRM, explains Frederic Moraillon, Director, Marketing, Business
Objects, APAC. It includes typical business functions such as sales force automation,
call centre automation, customer service, order management, invoice/billing,
and front-office suites.
This has been the basic and primary use of CRM in most enterprises, but when
integrated with the database and financial modules of an ERP, it has considerable
scope for generating sales leads.
Collaborative CRM reaches across various customer touch points such as e-mail,
phone calls, fax, the Web portal, and even snail mail. This facet of CRM concerns
channel management strategies and the integration of various legacy and advanced
systems at every customer touch point.
When BI meets CRM
A milestone in the evolution of CRM is the inclusion of analytics within the
technology. The concept of analytics comes from the world of business intelligence;
it is a real-time tool for converting raw data into something that can be used
to support business decisions.
The short- and long-term benefits of CRM can be felt to a large extent with
a combination of customer-facing technologies and analytic techniques such as
collaborative filtering, predictive modelling, business rules and state-based
Analytical CRM blends historical data with predictive science to produce forward-looking
views of customer behaviour.
An example of a successful deployment of this form of CRM can be seen at Standard
Chartered Bank. The analytical CRM solution allows the bank to effectively manage
and optimise the profitability of all products that constitute its retail portfolio.
The bank finds it easier to run targeted campaigns and elicit substantially
higher returns since the solution can perform profit modelling for each account.
The solution also enables micro-segmentation. Using analytics and a test-and-learn
culture, we know the probability of customers adopting a new product. We now
know which card member is more likely to take an auto loan. This has resulted
in more focussed marketing campaigns and reduced costs, with improved customer
satisfaction, says Sedjwick John Joseph, Head, Business Intelligence Unit,
Standard Chartered Bank.
A CRM solution can exist by itself in an enterprise
and doesn't need to be an add-on to an existing application. It can interoperate
with ERP and databases
GM, IT, Zip Telecom
All by itself
A CRM solution does not need the support of an enterprise application (such
as ERP) or financial applications. That said, it works well when there is a
database in place. Irrespective of the size of the company and the industry
vertical to which it belongs, the benefits of CRM in optimising revenue and
providing customer satisfaction can be realised with the aid of a self-reliant
Depending on an organisations requirements, CRM can
integrate with back-end systems and serve as the system of
record in the absence of other applications.
A CRM solution can exist by itself in an enterprise and doesnt need
to be an add-on to an existing enterprise application. It can interoperate with
ERP and databases to help refer to customer information in areas such as customer
ledger, bill status, and product status, points out Nandu Bhat, GM, IT,
Driving a business initiative without strategy behind it is like trying to drive
a car without a steering wheel. The car may be fitted with the most advanced
engine and a plush interior, but does not serve the purpose of taking you from
point A to point B because it cannot be directed to move along the chosen path.
An enterprise-wide CRM strategy is a comprehensive and detailed definition of
the scope of the CRM programme towards organisational goals. The strategy
is needed to keep businesses customer-centric and to help the company constantly
evolve internal processes and technology to acquire and retain customers,
explains Krishna Kumar.
A CRM strategy is especially useful for large organisations spread across different
Instead of duplicating CRM in different business units, the organisation
centralises a CRM strategy practice which will ensure standardised fulfilment
of customers needs irrespective of the location, adds Bhat.
Crafting a strategy
An enterprise-wide CRM strategy has to put in place systems, processes and
technology to align business functions such as sales, service and marketing
to build a coordinated effort to serve the customer and thus contribute to the
top-line or bottom-line of an organisation.
To create a CRM strategy in your organisation, the CIO needs to understand
what CRM can do, and ask why he needs to be customer-centric. The CIO should
develop the ability to put the right questions to business units, make benchmarks
of what the best companies are doing with CRM, and create a business case for
his company, explains Moraillon.
Chats with consultants and CIOs of companies that have successfully deployed
CRM help in this process, as do books on the subject.
Three months is about how long it takes on the average to learn from others
successes and then create a set of policies and guidelines for an organisation.
Kumar of iSeva suggests that Organisations should work backwards, begin
with the customer perspective, and align the customer needs to the business
goals to create a CRM strategy.
Cases in point
It is hard to believe how far the market for hosted
or on-demand CRM solutions has come. Robust overall growth in this segment
will continue in 2005 at rates exceeding 20 percent
General Manager, India, Talisma Corporation
Zip Telecom has adopted a two-pronged CRM strategy. Its CRM initiative is
focussed on incremental sales derived by adding customers every month. Secondly,
the focus is on service quality and control where it is important to build a
relationship with the customer. Software plays a significant role in the strategy.
iSeva provides BPO services such as inbound customer care,
outbound customer acquisition, and transaction and data processing to the mortgage,
banking, and high-technology industries. CRM is therefore a key application
for managing the business. The major factors dictating iSevas CRM strategy
- Closely integrated channels. The CRM initiatives
should ensure that channels such as e-mail and the knowledge base are integrated
to build efficiency in the service teams. They also help identify and service
the customer each time without asking too many basic questions.
- Scalability of the CRM infrastructure. The CRM infrastructure
should allow the company to serve the rapidly increasing requirements of clients.
- Reporting capabilities. The CRM infrastructure should
have robust reporting capabilities on operations for better management of
- One view. There should be a single, unified view
of the customer.
CRM has evolved over the last couple of years. This year we can look forward
to a number of technology trends. Girish Krishnamurthy, General Manager, India,
Talisma Corporation, mentions these few:
Corporate Performance Manag-ement (CPM). This will involve the use of a set
of objectives and supporting metrics that will keep the organisation on track.
CPM provides the strategic links to the business, along with tools to analyse
customer-related metrics and disseminate these throughout the organisation.
Customer Interaction Management (CIM). This is a new hybrid of the traditional
CRM technologies that have been adapted to the Internet and the growing number
of personal communication devices. CIM comprises parts of the previous generation
of CRM solutions with the addition of Web-based interaction solutions and wireless
device transaction management.
These new communication or interaction channels help companies add customer-facing
touch points to create a 360-degree interaction capability and enhance customer
On-Demand CRM. It is hard to believe how far the market for hosted or on-demand
CRM solutions has come. Robust overall growth in this segment will continue
in 2005 at rates exceeding 20 percent.
The CRM solution has resulted in more focussed marketing
campaigns and reduced costs, with improved customer satisfaction
Sedjwick John Joseph,
Head, Business Intelligence Unit, Standard Chartered Bank
Strategy and processes
Beyond the technical aspect, there are trends in the way CRM will be used strategically
Rapid growth of customer analytics. Now that the operational
and collaborative CRM modules have successfully gathered a glut of customer
information, it is time for companies to harness the power of analytical CRM.
These tools will help them go up the business productivity value chain by letting
them discover aspects such as the correct business channels, balancing customer
satisfaction, forecasting revenue and cost, and calculating risk.
Customer intelligence applications will help figure out customer profitability,
optimise response to marketing campaigns, and help customer call-agents deliver
real-time offers that truly benefit the customer.
True leaders will emerge in the fragmented mid-market CRM. The SMB market is
slowly consolidating. In 2005, for the first time, we will see long-term industry
leaders emerge for the mid-market. (Theres more about CRM for SMBs in
the next article.)
Hosted CRM will be reconsidered. Faced with steady benefits but potentially
increasing licence and subscription fees without clear additional benefit, companies
will reconsider the ongoing cost of hosted CRM agreements and look at hybrid
and other models that they can use in maturity without paying for in perpetuity.
Outsourcing CRM back offices. India is growing to be the back office of the
world, and many Indian companies are managing CRM operations for Fortune 500
and medium-sized companies in USA and Europe. Now that the outsourcing market
is mature, Indian companies may also begin to outsource for cost reduction.
Soutiman Das Gupta can be reached at