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Creating Business Value with Communication-enabled CRM Processes: Enhancing Marketing, Sales, and Service
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EXECUTIVE SUMMARY
Customer relationship management (CRM) issues can
often be traced to ineffective business processes that
involve human communication. Com panies can overcome
the limitations inherent in those marketing, sales, and
service processes by pursuing communication-enabled
business processes (CEBPs) - processes enabled by
communication systems that are tightly integrated with
business applications. With CEBP, firms can reduce latency,
enhance the ability to locate people with the right skills,
provide recording of and visibility into interactions, and
better enable end-to-end processes involving employees,
customers, suppliers, and partners.
Executives in every
industry . . . are facing
customer relationship
management issues
that can be traced to
a common source:
ineffective business
processes involving
human communication.
CEBP yields the most value in contactintensive
situations where service
requests are complex. In particular, when
business requirements call for a high
volume of interpersonal interactions,
when customers demand service
through multiple contact channels, and
where there are globally distributed
resources, CEBP can bring the greatest
benefits. When CEBP is well deployed
for CRM and other processes, it
results in simplified interactions for a
firm and its customers, faster response
times, greater accuracy, a breaking down
of organizational silos, and a better
social context for communication.
TWO COMPANIES WITH A RANGE
OF CRM CHALLENGES
LIMITED VISIBILITY, OUTDATED DATA,
COLD LEADS
At first, the chief marketing officer (CMO)
of the global consumer electronics
firm was quite pleased - management
was finally shifting from a technology
focus to a marketing focus to enhance
differentiation. But in the rush to initiate
new programs, there was little time to
carefully revamp customer relationship
management-based marketing processes.
Telemarketing staff across a
dozen locations worldwide handled
new campaign materials - including call
lists and scripts - using paper, spreadsheets,
and e-mail. Sales leads resulting
from the campaigns were simply
distributed by e-mail, and related call
information wasn't recorded.
After months of stepped-up marketing
investments, the CMO's C-level peers
were deeply disappointed with the
outcome. Marketing staff didn't have
meaningful insights into responses
to individual campaigns, and customer
data was perpetually out-of-date. By
the time new leads reached the sales
force, they were cold.
"Cold leads," proclaimed the CEO in a
different company, "are no excuse!"
For this European telecommunications
operator, the key issue driving sales
strategy in business-to-business markets
was commoditization. The CEO asked
his VP of sales exactly why revenue
targets weren't being met. Was pricing
the key factor - or were results tied to
the motivation of individual sales staff?
Were outcomes related to deteriorating
customer service levels? Since data
entry into the customer relationship
management (CRM) application was at
least two weeks late - and customer
interaction history and telephone call
content weren't centrally recorded -
the VP of sales didn't know the answer.
CREATING VALUE WITH COMMUNICATIONENABLED
PROCESSES
IMPROVING PROCESSES INVOLVING
HUMAN COMMUNICATION
Different Industries with Common
Issues
The CMO in the consumer electronics
firm and the VP of sales in the telecommunications
company - and, in fact,
executives in every industry - are
facing CRM issues that can be traced
to a common source: ineffective
business processes involving human
communi cation.
Performance problems are particularly
acute in complex, global organizations
in which knowledge and responsibility
are widely distributed and in which
staffers are highly mobile. Difficulties
with processes persist because of
latency in accomplishing tasks, inability
to locate the right skills to address an
issue, and delayed execution of transactions
in business applications. As a result
of these human communication issues,
companies are adversely affected by:
- Outdated customer data, which can
result in cold leads and inappropriate
communication with customers
- An inability to control events in real
time, such as marketing campaign
execution, call center staffing levels,
and sales force assignments
- Limited insights into the root causes
of high or low performance by
employees, including sales staff and
customer service agents
Enabling Visibility and Reducing
Latency
Many companies have invested heavily
in CRM solutions to enable processes
and manage customer data used by
marketing, sales, and service staff. And
they have invested in telephony systems
to handle related voice communications.
But companies have often established
the communication channels as distinct,
closed systems with self-contained
infrastructures - completely separate
from business applications. And therein
lies the opportunity.
By pursuing communication-enabled
business processes (CEBPs) - processes
enabled by communication systems
that are tightly integrated with business
applications - companies can overcome
the limitations inherent in business processes
involving human communication.
Firms can create value by:
- Substantially reducing latency
- Enhancing the ability to locate people
with the right skills
- Providing recording of and visibility
into interactions
- Better enabling end-to-end processes
involving employees, customers,
suppliers, and partners
With software-based applications
increasingly replacing hardware-based
communication systems - such as
private branch exchanges (PBXs) -
firms can more flexibly connect mobile
and geographically distributed workforces
that use a range of communication
devices and methods, such as
desktop phones, soft phones on a PC,
mobile phones and PDAs, e-mails,
short message service (SMS), instant
messages, and Web contacts. Figure 1
illustrates the move from isolated
communication system silos to
software-based integrated communication
and business process applications
- in which counterpart systems can
readily exchange information.
Firms can also provide new platforms
for process innovation - for example,
using technology to automatically
trigger responses to events and to
route calls based on customer value -
transforming company operations and
favorably shifting the perception of
company stakeholders. In short, by
better sensing and responding to
changes in the business environment,
companies can substantially improve
their agility.
Figure 1: Silos Versus Integrated Multichannel Communication
Many companies have invested heavily in CRM solutions
to enable processes and manage customer data used
by marketing, sales, and service staff. And they have
invested in telephony systems to handle related voice
communications. But companies have often established
the communication channels as distinct, closed systems
with self-contained infrastructures - completely separate
from business applications. And therein lies the
opportunity.
CREATING VALUE THROUGH
ENHANCED MARKETING PROCESSES
ENHANCING CAMPAIGN EXECUTION AND
LEAD ASSIGNMENT
After reviewing the situation with the CIO
and other C-level executives, the CMO
of the global consumer electronics
firm determined that their problems -
including outdated customer data, limited
visibility into campaign responses, and
cold leads - could be traced to marketing
processes that were not designed
to address factors intrinsic to human
communication.
A Rapid, Low-Cost CEBP
Implementation for Marketing
Because the CMO had a strong interest
in seeing the new marketing programs
succeed, the executives agreed to a
proposal to "communication enable"
the business processes. After the lowcost
CEBP implementation was comple t -
ed in three months, all telemarketing
staff and managers throughout the
world were able to use PCs connected
to a centralized and integrated CRM
and communication system. The implementation
enabled cost-effective use
of outsourced telesales subcontractors,
working in parallel with the firm's
telemarketing employees on multiple
campaigns.
Following the go-live stage, managers
can now segment the customer database,
allocating contact lists and scripts
to internal and external telemarketing
teams in real time. Marketing experts
can make contact with customers using
their preferred method - phone, e-mail,
fax, or text messaging. They can record
all interaction-related information - such
as changes in customer contact details, leads, and sales orders - through a
single user interface. And all previous
customer interaction history is visible
to employees who have the appropriate
authorization.
Measurable Improvements to
Marketing Process Performance
Over a 10-month period, the CEBP
implementation achieved measurable
outcomes that are aligned with the
strategic goals of the company. In particular,
marketing campaigns increased
new leads by 23%, lead-to-sales conversion
rates improved by 37%, and
customer data accuracy increased by
18%. These outcomes were achieved
because:
- Managers could centrally monitor and
control campaign execution, change
call scripts based on customer feedback
and results, coach underperforming
individuals, and arrange for
additional training for entire teams
- The leads were automatically
assigned to the sales teams based
on their performance and the company's
customer ownership rules
- Campaign-related leads and sales
orders secured through other
channels, such as call centers, were
reported in the central system and
were available as input for decision
making and follow-up actions
The CMO and C-level colleagues are
quite pleased with the outcomes -
as are employees and customers, who
have experienced smoother interactions,
greater accuracy, and a better social context for conducting business.
Since the benefits are clear and manifold,
senior management has initiated programs
to find additional opportunities
for implementing CEBP.
As the company develops
the business
case, implementation
plan, and detailed
blueprint, it's essential
to secure buy in from
stakeholders and
demonstrate the business
value that will
be delivered. It's also
important to recognize
that many communicationdependent
proces s -
es may be deeply
entrenched. Thus, it's
essential to develop
change management
programs that counter
organizational inertia
and resistance.
CREATING VALUE THROUGH
ENHANCED SALES PROCESSES
IMPROVING CUSTOMER INFORMATION
ACCESS AND TASK ALLOCATION
Meanwhile, in the telecommunications
firm, sales targets were still not being
met. The CEO suggested that the VP
of sales initiate a multifunctional task
force to uncover the reasons why. After
interviewing several sales staff, call
center agents, and customers, the task
force found that the reasons - which
did, in fact, have their roots in both
sales and service processes - were
evolving over time and could not easily
be isolated.
Upon further investigation, the task
force recommended enhancements to
the sales and service processes, enabling
real-time adaptation to the needs of the
changing market. The task force noted
that these CRM-based processes
depended heavily on human communication
and would perform better if they
were communication enabled.
After a relatively rapid, yet comprehensive
CEBP implementation, the mobile sales force, call center agents, and
managers were able to connect to an
integrated CRM and communication
system from any PC or mobile device.
In Figure 2, you can see how CEBP
functions in sales and service
processes.
Liberating Customer Information
As a result of these changes, the
company is finally liberating customer
information that had been isolated in
personal files by salespeople who
travel frequently. All customer contact
details and interaction history - together
with the interaction content, such as
e-mails and call recordings - are stored
in a central repository for access by
salespeople and other staff. Ongoing
issues and the immediate needs of
customers - recorded by customer
service staff and others - are visible to
the responsible salesperson. Tasks
related to the customer relationship can be assigned manually or automatically
to a responsible salesperson.
Managers are able to centrally monitor
and control sales execution by:
- Assigning leads
- Pushing tasks and reminders to sales
staff
- Monitoring how the quantity and
direction of customer interactions
correlate with revenue performance
- Identifying root causes for low and
high performance
- Coaching underperforming individuals
- Arranging additional training for entire
teams, when needed
As a result of the CEBP implementation
encompassing sales processes, yearover-
year adherence to the plan by
individual sales staff improved by 63%,
customer retention rates increased by
12%, and sales grew by 8%.
Figure 2: CEBP in a Business-to-Business Telecommunications Firm
CREATING VALUE THROUGH
ENHANCED SERVICE PROCESSES
ENHANCING STAFF TRAINING
AND SOCIAL INTERACTIONS
While investigating the shortfalls in
achieving sales targets, the VP's task
force found that there were opportunities
to improve the telecommunications
firm's service performance. Improvements
- enhancing the experience of
existing customers and advancing the
company's reputation in the market -
would contribute to sustaining pricing
power, lowering costs, and achieving
higher sales and profitability levels.
Service Process Issues
The telecommunications company
operates a call center, which had been
using a best-of-breed contact center
system. However, it was not integrated
with the company's CRM application
or the telephony systems that the back
office was using. As a consequence,
agent utilization in the service center
was only at 60%. Moreover, routine
inquiries were solved by customers
through a self-service Web portal;
thus, the complexity of phone and e-mail
requests had increased, which lowered
the first line's first-time resolution
capabilities and burdened the back
office.
Measurable Improvements
to Service Process Performance
Six months after sales implemented
CEBP, customer service implemented
CEBP. After the go-live stage in customer
service, all users with authorization
could connect to an integrated CRM
and communication system from any
network-connected PC or mobile
device.
In addition to best-of-breed communication
tools, the front-line agents have
an integrated user interface for accessing
customer data, interaction history,
and back-office queues. The back-office
experts are using similar communication
tools.
Since all communication events and
interaction history are stored in a central
repository, management is now able
to understand the areas of expertise
required for servicing customer requests.
This information helps the company
design training courses for the service
agents. Also, during the first two months
after the go-live stage, the back office
recorded a knowledge base of frequently asked questions. The front line can use
the information in this base to solve
customer issues in more than 80% of the
cases - thus, transfers to the back office
have been reduced by more than 50%.
By improving customer service, the
telecommunications company's management
found that it was able to counter
the trend toward commoditization. With
fewer distractions, such as inaccurate
data and misinformed personnel, social
interactions among sales staff, service
agents, and customers improved. In
addition, customers were less likely
to shop the rate the company was
offering, and the company was able to
adhere to its pricing policies.
Agent utilization increased from 60% to
85%, customer satisfaction improved
by 14%, and first-call resolution rates
increased by 23%. Sales revenue grew
by an additional 5% after the first year
of new CEBP-based service processes
on top of the 6% year-over-year growth
that had been achieved with CEBP-based
sales processes alone.
MAXIMIZING BUSINESS VALUE
WITH CEBP
CHANGE MANAGEMENT AND
YOUR COMPANY'S PROCESSES
Best Practices for CEBP Adoption
Companies that recognize that there
may be value in implementing CEBP
should approach adoption as they would
any other investment in their business.
A key step is to develop a business
case, demonstrating how the CEBP
implementation will support the strategic
objectives of the company - ideally
with measurable goals that resonate
with senior management.
As the company develops the business
case, implementation plan, and detailed
blueprint, it's essential to secure buy
in from stakeholders and demonstrate
the business value that will be delivered.
It's also important to recognize that many
communication-dependent processes
may be deeply entrenched. Thus, it's
essential to develop change management
programs that counter organizational
inertia and resistance.
Fortunately, CEBP implementation
is evolutionary - not revolutionary. It's
usually not possible or desirable to
replace all communication systems
overnight - companies want to pace
and align investments with the ongoing
realization of business value.
Selecting the Highest Yield
Opportunities
To maximize business value, companies
should focus on CEBP opportunities
with the likelihood for the highest returns.
CEBP yields the most value in contactintensive
situations where service
requests are complex. In particular,
when business requirements call for a
high volume of interpersonal interactions,
when customers demand service
through multiple contact channels, and
where there are globally distributed
resources, CEBP can bring the greatest
benefits. Well-deployed CEBP results
in simplified interactions for a firm and
its customers, faster response times,
greater accuracy, a breaking down of
organizational silos, and a better social
context for communication.
As we have seen, these types of outcomes
were achieved for the European
telecommunications firm and the global
consumer electronics company. Banking,
insurance, travel agencies, logistics
firms, retail, media, hospitals, and
government are other examples where
personal interactions are essential and
CEBP can bring substantial value. Above all, companies need to focus on understanding
their own processes - regardless
of industry - and find those with
communication characteristics that best
lend themselves to achieving value
with CEBP.
CEBP implementation
is evolutionary - not
revolutionary. It's usually
not possible or
desirable to replace
all communication
systems overnight -
companies want to
pace and align investments
with the ongoing
realization of
business value.
THE VALUE OF END-TO-END
PROCESS INTEGRATION
CEBP FOR CRM AND BEYOND
CEBP yields the most
value in contactintensive
situations
where service requests
are complex. In particular,
when business
requirements call for
a high volume of
interpersonal interactions
. . . and where
there are globally
distributed resources,
CEBP can bring the
greatest benefits.
Well-deployed CEBP
results in simplified
interactions for a firm
and its customers,
faster response times,
greater accuracy, a
breaking down of organizational
silos, and a
better social context
for commu ni cation.
Typically, CEBP focuses on subsets of
end-to-end processes that are executed
in a company. For example, CEBP for
marketing campaigns, for sales teams,
and for service agents each enables
pieces of a larger end-to-end process
of finding new opportunities, closing
sales, and collecting payment - that is,
the end-to-end lead-to-cash process.
Companies can achieve superior value
by considering the impact of CEBP
on value creation in broad end-to-end
processes - even though an implementation
is likely to focus on a process
subset.
We have discussed CEBP for CRM in
this paper, but, of course, any business
process can be a candidate for communication
enablement. In fact, the opportunities
for process innovation - and
the power of communication enablement
- live well beyond the borders of
CRM processes. You can imagine that
a firm's human resources, procurement,
product design, and logistics activities
have contact-intensive subprocesses -
and, thus, are also candidates for CEBP
deployment.
SAP' Business Communications
Management Software
The SAP' Business Communications
Management software is an enterprise
solution that, together with the SAP
Customer Relationship Management
(SAP CRM) application, provides the
technology foundation for CEBP. SAP
Business Communications Management
is an all-IP communication software
solution that replaces traditional telephone
solutions. It offers SAP CRM
customers the ability to integrate multichannel
communications with customerfacing
processes, enabling companies
to better utilize the knowledge distributed
throughout their organizations and
offering a seamless experience across
channels.
SAP CRM is integrated with the full
array of SAP solutions covering enterprise
resource planning, supply chain
management, supplier relationship
management, and more. Thus, through
its connection with SAP CRM, communication
enablement with SAP Business
Communications Management can
enhance the performance of the comprehensive
set of processes within a
company.
If you want to know more about how
SAP can help your company implement
communication-enabled business processes,
call your SAP representative
today, or visit us on the Web at
www.sap.com/crm.
CONTENT
- Executive Summary
- Two Companies with a
Range of CRM Challenges
- Creating Value with
Communication-Enabled
Processes
- Different Industries with Common
Issues
- Enabling Visibility and Reducing
Latency
- Creating Value Through
Enhanced Marketing Processes
- A Rapid, Low-Cost CEBP
Implementation for Marketing
- Measurable Improvements to
Marketing Process Performance
- Creating Value Through
Enhanced Sales Processes
- Liberating Customer Information
- Creating Value Through
Enhanced Service Processes
- Service Process Issues
- Measurable Improvements to
Service Process Performance
- Maximizing Business Value
with CEBP
- Best Practices for CEBP Adoption
- Selecting the Highest Yield
Opportunities
- The Value of End-to-End
Process Integration
- SAP Business Communications
Management Software