ECR Europe 2003 CRM Exhibitor Brief

1、ECR Europe 2003 CRM Exhibitor BriefECR Europe 2003CRM Exhibitor BriefCRM Business Case and ROICurrent Perceptions55% of all CRM projects will fail over the next 5 years Gartner Group41% of CRM projects are “experiencing difficulty” or are “potential flops” Data Warehousing Institute56% of US-based c

2、ompanies have not achieved a measurable return on their CRM investment crmindustry4Business Case Lifecyclechange managementbusiness casecollaborative CRM strategycorporate strategymetrics & benefits managementprogram managementproject managementbusiness transformation (#)business initiatives &am

3、p; programs (*)data enhancementIT build & systems integrationbusiness process outsourcingIT outsourcingevaluatestrategisedevelopimplementmanageC-CRM# capability planning, operating model, process design, etc.* loyalty schemes, direct marketing, etc.Source: Gartner ResearchSet up business caseLin

4、k business case to metricsFollow up on metrics to ensure delivery of benefitsPay for perform-anceBenefit Categories and DriversTechnology driven(integration &automation)Skill, organisation structure & process drivenROIIncreased Revenue / ProfitabilityReduced CostIT run / maintenance costAdmi

5、nistration costCustomer insight & segmentationResponse to customer demandsIntegrated executionInteraction costAccenture PropositionLower total cost of ownershipGreater predictability and lower riskSmaller upfront funding “gap”? 20m*? 14mBaseline TCOTCO with AccenturetimeProjected costAccenture c

6、ontracted cost80%?11.2mBenefits achievedAccenture fees100%110%?14m?15.4mWhat have and can CRM implementations deliver? Looking at recent CRM studies and reports, the general sentiment seems to be one of scepticism at best. Some comments even refer to CRM as a fad past its peak. And the figures do in

7、deed paint a dark picture:Gartner Group predicts that more than half of CRM projects will fail to meet their objectives over the next 5 years41% of CRM projects are experiencing difficulties according to the Data Warehousing InstituteJust over half of the companies surveyed in a US study have not ac

8、hieved a measurable return on their CRM investmentEach individual case underlying these statistics will have its very own reason for “not delivering” business results. However, considering the main reasons for failure, the majority relate directly to a poorly prepared and managed business case.Failu

9、re to obtain and maintain executive support for the project usually, the business case looks too risky to the executives to sign-off the sizable investment requiredFailure to align key internal functions / business units on goals and mission of the project as CRM by definition crosses many functions

10、 within a business, key benefits may have been double counted in between two or more projects or areas; and “scope-creep” sets in, making the CRM project the magic remedy solving all issues to everybodyInability to accurately link the CRM project to higher-level business strategies inability to quan

11、tify the benefits of a CRM initiative in terms of corporate strategy determines perceived failure from the startFocusing in “capability building” instead of ROI creation not all CRM capabilities deliver a financial return to all companies(Other reasons are Lack of integrated plan for project impleme

12、ntation; AND Failure to achieve success early in the project)The difficulty in building a precise and quantifiable CRM business case has been hinted at in these main reasons for (perceived) failure First, a true CRM implementation will consist of far more than screwing in a new piece of software; it

13、 requires a fundamental shift within most companies organisation, skill profiles and cross functional processes, to move to a true customer centric business model. Buy-in needs to be achieved from all stakeholders. And, each items in the business case need to be strong enough to be relevant througho

14、ut the duration of the programme.Secondly, although consumers more and more expect CRM capabilities, simply saying that this has become “just” a new cost of doing business is not helpful. The business case also needs to demonstrate and quantify this claim, enabling a company to select and start with

15、 a combination of those projects promising the highest financial return and “quick win” solutionsLast, but not least, the complexity of the “C” in CRM is particular to the FMCG industry, and benefits rely on collaboration between the parties involved as neither side alone is in possession of the who

16、le consumer picture.In the remaining 5 minutes, I will therefore concentrate on 3 pointsWhen to start with the business case and how to use it during the lifecycle of the CRM programmeThe key benefit areas for the business case How Accenture can make the differenceAs the cost of a typical CRM implem

17、entation continues to grow and the pressure to address the shortcomings in customer management operations intensifies organisations will have to become more vigilant in identifying which CRM capabilities will provide the greatest financial benefit.The first step for an organisation embarking on a ne

18、w CRM initiative is to align CRM and corporate strategy, identifying the key areas where better customer relationship management can deliver corporate goals. The second necessary step before building the detailed business case for a CRM initiative is to conduct a comprehensive assessment of current

19、CRM capabilities, showing the most pressing gaps hindering execution of the strategy. This process will enable companies to determine where it should focus its CRM efforts to achieve maximum financial benefit. With a solid understanding as to where the company can generate the greatest improvements

20、it can then identify which CRM capabilities are necessary to realise these. For example, if 1-to-1 marketing is seen as a way to significantly increase revenues, customer segmentation, predictive modelling and marketing campaign management would be critical to achieving this revenue goal.The set up

21、of the business case is completed when the total potential profit increases are compared to the cost of implementing the required solution (including change management, software, hardware, training, third party resources, maintenance). The key hurdle at this stage is failure to have the required exe

22、cutive support for taking the project further. In many cases, project teams fail to ensure early in the process that senior management understands the scale and impact of the initiative and are convinced of the return promised by the required investment.Once funding has been secured for the project

23、to go ahead, the business case needs to be managed throughout the lifecycle of the programme. As “you get what you measure”, the business case is a key tool for the programme management to determine whether they are ultimately on track or not. Identified benefits therefore need to be translated into

24、 easily measurable and understandable KPIs, used to build further momentum within the company. As an example, a European retailer set out to offer substantially better customer service; the solution was to implement a customer service support tool enabling staff to see the customer history and have

25、access to a powerful knowledge base. The financial benefit rested on reduction of customer service time spent per customer the KPI measured is the escalation of complaints from first contact to head-office.Program management also needs to ensure continued support by senior management for the initiat

26、ive, in particular in cases where identified benefits are cross functional (e.g. forecasting, with the underlying danger of double counting these), or when benefit realisation relies on fundamental changes in the organisational structure of the company (e.g. shifting demand planning responsibility f

27、rom the supply chain into the sales department). Again, these and similar dependencies require cross-functional buy-in, and senior management understanding of the solution to deliver the benefits targetted.Despite the gloom, the majority of companies have CRM initiatives at least on their radar scre

28、en (enter success stories if available). The promise of Customer Relationship Management greater customer loyalty through a customer centric organisation is a huge prize to be won in a market with stagnant growth and overall diminishing brand loyalty by consumers. Looking at the main benefit categor

29、ies emphasises the importance of the business change side (skills, organisational structure, processes) of a typical CRM programme in comparison with the technology part.Implementing a CRM suite as such will reduce the plethora of legacy systems and therefore lower run and maintenance cost for IT. F

30、or example the ability to operate out of a single hosting location and the cost reduction when supporting a single system as opposed to 5 10. In addition, technology components allow lower administration and interaction costs, through the automation of processes and integration of previously separat

31、e data flows, providing timely and more accurate information when required. From our experience, these IT cost savings pay for the IT implementation costs alone. Far more substantial benefits can be realised through increased revenue and operating profitability. Technology components are an enabler

32、in both areas, but developing an appropriate customer strategy, increasing the skills of your customer facing workforce, and streamlining processes and the organisation structure lie at the heart of turning this promise into reality. The key benefits here are achieving a single 6view of the customer

33、, which allows rational decisions on customer acquisition and retention investment and targets; ability to cross- and up-sell through understanding your customers and segmenting them appropriately; and, more accurate / fact based forecasting.While recommending to develop a strategy, conduct a capabi

34、lity assessment and set up a detailed business case, companies do not have long to complete this stage. Within the market place, practices and technologies used to manage customer relationships have become more sophisticated, and, as mentioned before, customers have too.Consumers expect more, and th

35、e danger is that your competitors are better set up and equipped to lure them away through understanding their demands and being able to act on these fast. With increased pressure from investors to increase revenue and cut costs, while consumers expect better service, companies are caught between a

36、rock and a hard place. Current reality is that many companies rely on outdated strategies, investment approaches and operation models putting capital already invested at riskThis is not a minor challenge which can be solved through a series of small, tactical programmes.Companies need to rethink their traditional belief