BGSCustomer Relationship

Management

BGSCustomer Relationship

ManagementChapter 4

Organization and CRM

Chapter 4Organization and CRM

Thomson Publishing 2007 All Rights Reserved

IntroductionMultiple Dimensions

• Business dimension• Technological dimension• People dimension• Time dimension

IntroductionMcKinsey Study

• Ten organizational characteristics fall into three distinct categories: structure, skills, and processes

• Structure– Manage trade-offs around critical roles and

resource access– Centrally located analytical experts– Cross-function integration– Quick access to multiple customer

opportunities

IntroductionMcKinsey Study

• Skills– Priority on customer analytics and

insights across key decision makers– Carefully balanced core CRM skill sets– Skill gaps identified and filled quickly

IntroductionMcKinsey Study

• Processes– Customer-specific metrics and

scorecards embedded into performance evaluations, incentives, and financial plans

– Decision support automated– IT and business reengineered to ensure

responsiveness to customer

The Human Factor

• Leadership– Start small– Customer centric– Across whole organization

• Human Resource Capacity – CRM enablers– CRM users

The Human Factor

• Communication– Solicit feedback before setting

strategy• Feedback dimensions include financial,

people, technology, value chain, competitive environment, and macroenvironmental forces

– Develop “Phase” approach

• Cooperation– Internal– External

The Human Factor

• People – Knowledge base– Skill gaps– Role conflict– Customer selection– Maintain momentum

Organization EnvironmentCulture

• Indicators that may lead to a sub-optimal CRM initiative include:– Reward structure that favors

adherence to hard nonflexible standards

– Production orientated versus marketing orientated

– Leadership from offshore entity– Executive leadership out-of-touch with

customer

Organization EnvironmentCulture

• Indicators that may lead to a sub-optimal CRM initiative include:– Lack of empowerment– Predominately top-down decision

making and information flow– Internal competitive work methodology

and reward systems not aligned with CRM strategy

Organization EnvironmentSize

• Size is not a determinant of an organization’s potential CRM success.

• Different sizes do create different advantages and disadvantages.

• A large organization’s advantage can be a disadvantage for a small organization and its disadvantage an advantage for the smaller organization.

Organization EnvironmentSize

• Large organization advantages– Financial resources or access to those

resources– Economies of scale with respect to

technology and human resources– Potentially deeper levels of CRM

expertise or easier access to that expertise

– Technology and CRM consultative suppliers more ready available

Organization EnvironmentSize

• Large organization advantages– Large customer base can generate

appropriate funding dollars– Large amount of customer and

prospect data can enable more in-depth marketing intelligence

Organization EnvironmentSize

• Large organization disadvantages– Functional structure and silos– Large employee base increases

complexity in CRM training and implementation

– Customer and prospect data may have proliferated throughout the organization with no thoughts to a single view of the customer

– Cost of creating a single accurate view may be prohibitive

Organization EnvironmentStructure

• Functional or “silo”– Can inhibit quick response– Adds complexity to CRM strategy

• Product/Service or brand alignment– Good at collecting customer

information relative to specific brand– May inhibit ability to create a holistic

view across brands

Organization EnvironmentStructure

• Geographic structure challenges– Communication of CRM strategies and

best practices throughout all customer interaction points

– Timely and accurate dissemination of relative customer information from all interaction touch points; ability to process this information quickly with an accurate reverse information flow

Organization EnvironmentStructure

• Geographic structure challenges– Flexibility in changing CRM strategy to

optimize specific geographic opportunities or adjust to geographic nuances, constraints, or opportunities

– Integration of value chain members across geographic boundaries

– Ability to sustain CRM momentum to decentralized employees

Organization EnvironmentStructure

• Geographic structure challenges– Adopt input from decentralized

employees into best practices for same or different areas

– Support organization entities for different time zone customers, including Internet and phone interactions

Organization EnvironmentStructure

• Account management– Heavy customer interaction – Extensive use of CRM-enabling software

• Industry category• Impact on value chain

• Matrix• Can be optimal for CRM

• Structure around customer• Increase in complexity and cost the more

fragmented the customer base

Organization EnvironmentTechnology

• Integration across all areas is desired

• Changes in technology solutions over time

• Impact on current operations if changes made

• Different licenses, leases, or contractual terms for the same or different OEMs

• Organizational silo-based decisions

Organization EnvironmentTechnology

• Budget constraints• Strategic and technical

understanding and leadership• High skill level employee turnover• Resistance to frequent change of

business process caused by rapid technology change

• Merger and acquisition activity complicates the issues

Organization EnvironmentProcess

• Hard versus soft standards• Staffing• Outsourcing functions• Cost constraints• Realistic assessment of required

depth and breadth of desired customer relationship

Value Chain Organization

• Business functions provided by different value chain members have increased in number and complexity

• Rapid changes in technology create:– Pressure to adopt in effort to remain

competitive– Dilemma, as rapid adoption creates

challenges of coordination

Value Chain Organization

• Changes to pull and push strategies need coordination throughout chain

• Business function changes need to be coordinated with technology changes across the chain

Other Considerations

• Knowledge management: The process of transferring captured information into knowledge that can be shared by respective parties within the organization or value chain in an effort to enable CRM efforts

• CRM is a long-term strategy that requires a long-term investment strategy

Summary

Category Stage 1 Stage 2 Stage 3 Stage 4

CRMPlanning

Limitedbudget

Annualplanning within required budget

Planning part of corp. strategy

Value chain inclusion in corp. CRM planning

MarketResearch

None Focus groups, survey

Batch transact-ion analysis

Integrated analysis, including real-time activity

Summary

Category Stage 1 Stage 2 Stage 3 Stage 4

CRMOrientation

Mass market

Segments

Custom-ization by segments

Custom-ization by individual

CRM Channel MGMT.

None Basic internal SLA’s tied to CRM strategy

Basic external SLA’s tied to CRM strategy

Integrated CRM strategy tied to end cust. value proposition

SummaryCategory Stage1 Stage 2 Stage 3 Stage 4

Communica-tion

Disparate

Coordin-ated internally

Coordinated internally with external parameters

Channel- integrated dialogue with end customer

MKTOrganization

Sales orientat-ion

Sales and MKT

Org. coordination across all functions

Value chain member integration

SummaryCategory Stage 1 Stage 2 Stage 3 Stage 4

CRM methodology training

None Sales and MKT

Cross organiza-tional

Value chain coordina-tion

Employee recognition

None tied to CRM

Informal based on “at-a-boys”

Formal based on predefined metrics

Tied directly to internal and external customer satisfaction and loyalty

Summary

Category Stage 1 Stage 2 Stage 3 Stage 4

Customer relationship

None Efficient complaint handling

Hard standards for customer interaction

Empower-ment with soft standards

Technology

Basic and disparate

Internal customer state-of-the-art

External customer state-of-the-art

Value chain integration