Next Generation CRM

					   NEXT
    GENERATION
              CRM
A Communications Industry Perspective
                                     CONTENTS
Introduction ................................................................................ 2


How Traditional CRM Ignores the Customer ............................ 3

The Evolution of CRM ................................................................. 6


The Competitive Advantages of Next Generation CRM ........... 8


Implementing Next Generation CRM ........................................11


Next Generation CRM Market Imperatives ...............................16


Next Generation CRM in Action: The ipulsys Case Study ......... 18


Why Next Generation CRM Works ..............................................23


Endnotes & Acknowledgements ................................................24
            The following fictionalized vignette presents a picture of what is available today at a
number of companies that are pursuing Next Generation Customer Relationship Management
(CRM) solutions.
            Schillinger International, an automotive components maker, maintains design and
production facilities throughout North America, Europe, and Asia. The firm uses an IP-based
virtual private network (VPN) to connect its design teams, and employs computer-assisted
design tools in its product development process. The company's network provider is
GlobalCom, a leading communications company that has deployed next generation CRM
software.
            We follow Schillinger's Vice President of Communication, Darla Chase, as she copes
with the company's shifting network capacity demands.


08:17: Chase receives an e-mail alert from the      08:30: Chase confirms that these centers
       web center at GlobalCom: network                    completed a major redesign of
       latency between Schillinger's design                Schillinger's main product a month ago,
       centers in Barcelona, Lyon, and Singapore           and are unlikely to use this capacity in the
       has increased due to higher traffic                 near future.
       volume.
                                                    08:45: Sophisticated modeling tools on the
08:19: Chase accesses the secure extranet that             extranet allow Chase to determine the
       GlobalCom has dedicated to Schillinger's            optimal mix of re-allocating bandwidth
       account.                                            from San Diego, London, and Bonn
                                                           to the now-congested routes between
08:20: Using an interactive "customer                      Barcelona, Lyon, and Singapore, and
       dashboard" that monitors Schillinger's              purchases of additional capacity as a
       IP-VPN, Chase confirms that this diagnosis          cushion against short-term spikes in
       is correct.                                         demand.


08:24: A review of overall network usage reveals    08:52: Thanks to GlobalCom's integrated billing
       that design centers in San Diego, London,           application, Chase can allocate the
       and Bonn have been using less than 40%              additional bandwidth costs to the
       of the bandwidth allocated to them for              relevant design centers, which allows
       about three weeks.                                  Schillinger to price its design work
                                                           accurately.

            In this scenario, Schillinger has dynamically self-provisioned in order to cope
with shifting network requirements. None of this has required an internal bureaucracy at
Schillinger or contact with GlobalCom's customer service people. Instead, it has all been
done via sophisticated monitoring of network usage and real time responses to anticipated
demand. It is this level of functionality - and ultimately customer satisfaction - that is the
promise of Next Generation Customer Relationship Management software tools.


                                                                                                          1
    Next Generation CRM
           Introduction
                      Competition in the communications industry has                            The future, however, belongs to a broader vision

           become the strategist's nightmare of a war waged on many fronts.          that moves from simply managing customer relationships to

           Battles over technology rage as firms grapple with the disruptive         enhancing customer value—an approach that reflects the need

           effects of wireless service demands and Internet-based telephony          for communications firms to provide increased value to customers

           on the private switched telephone network. A global race for scale        while simultaneously capturing more value for themselves. This

           has seen national incumbents invest billions in foreign markets.          requires a shift from merely serving existing customers with existing

           The perceived need to diversify services has companies such as            products in a cost effective manner to delivering superior value

           AT&T, NTT, and Vodafone moving toward content provision, despite          through dynamic product and service strategies that track and

           capital market pressures to stay focused on their profitable core         respond to evolving customer needs.

           businesses. And the emergence of "non-telco" entrants such as                        In contrast to traditional CRM, a Next Generation

           Virgin in the UK and a wide variety of electric utility companies         Customer Relationship Management strategy creates seamless

           in the US is creating a new class of competitors single-mindedly          integration from the customer to the network and back again,

           focused on winning the highest-value customers.                           delivering superior performance across the full spectrum of

                      Despite uncertainty about how best to compete in the           customer engagement opportunities. From customer-driven product

           evolving communications marketplace, most companies know that             configuration and provisioning to opportunity management, order
2
           at least one aspect of their business is critically important no matter   management, and targeted customer service, forward-thinking

           how other competitive questions are resolved: they know they must         communications companies are already implementing next

           excel at serving customers.                                               generation CRM with remarkable results.

                      That's why, across every industry, Customer Relationship

           Management (CRM) has emerged as a management priority for
                                                                                      FIGURE 1 - GETTING CLOSE TO CUSTOMERS: THE RECENT EVOLUTION
           four of every five Fortune 1000 companies. The total market for
                                                                                         First Generation CRM        Automated Call Centers
           CRM technologies and services exploded to US $39 billion in 1999,

           and is projected to exceed US $125 billion by 2004—a penetration           Second Generation CRM          Automated Call Centers with
                                                                                                                     Customer Information Systems
                                                                                                                     (CIS)
           rate and level of investment that rivals Total Quality Management in

           its heyday, and, more recently, Enterprise Resource Planning (ERP).                                                       y
                                                                                                                     Seamless Delivery & Positioning,
                                                                                                                     Customer Self-Service,
                      In its most basic form, CRM is an integrated approach                                          1-to-1 Customization
                                                                                                                     Network Integrated CIS
           to sales, customer care and service quality designed to lower

           selling costs, garner wallet share, and increase customer retention.

           Basic CRM generally involves automated call centers, sales force

           automation, and integrated customer information systems. For an

           incumbent communications company, where the key to short-term

           profitability may involve defending an embattled franchise, this

           "first generation" CRM can often deliver immediate value.
                                                              How Traditional CRM Ignores the Customer

How Traditional CRM Ignores the Customer
           The term “Customer Relationship Management” came               solutions have emerged in the marketplace, basic CRM functionality

into vogue in the mid-1990s. Fueled by legends of undying customer        has not evolved significantly. First-generation automated call

loyalty at companies such as Nordstrom's and the siren song               centers have given way to second-generation technology; Customer

of cross-selling at financial services powerhouses like American          Information Systems (CIS) have moved to the desktop, and advanced

Express, corporations embraced CRM as a winning business strategy.        data mining tools now enable better predictive modeling. More

In its application, CRM took the form of integrating existing             recently, CRM vendors have wrapped web interfaces around their

customer care initiatives and support infrastructure.                     traditional solutions in an attempt to create "e-CRM," while adding

           Gartner Group heralded the CRM groundswell in its 1996         little in the way of new functionality.

report entitled Customer Service and Support: Growing Relationships                    Like other enterprise initiatives such as ERP, traditional

and Increasing Profits. Despite the high-sounding title, however,         CRM has grown into a large and complex set of applications and

Gartner concluded simply that "… the next step in achieving world-        functionalities, especially in the communications industry where

class customer service: an integrated call center with a single           minute-by-minute transactional data provide a wealth of customer

customer information database."1 In other words, CRM was an effort        data. But despite the rhetoric of getting closer to customers, most

to reduce duplication in service provision and alleviate customer         companies have been introspective with their CRM investment,

frustration by providing a single, well-informed point of contact         driven more by short-term revenue and cost reduction needs than

between the customer and the company.                                     by customer value. Call center improvements, next-generation sales

           From this modest start, the majority of Customer               force automation, and advanced customer data warehouses can all

Relationship Management strategies have moved only slightly               contribute to the bottom-line, but they are not likely to produce

beyond their traditional focus on call centers, sales force automation,   meaningful shifts in customer relationships.

and customer information systems. Although scores of packaged

         FIGURE 2 - MOST FORTUNE 1000 COMPANIES DIRECT THEIR CRM INVESTMENTS TOWARD IMPROVING SALES AND MARKETING PERFORMANCE

                  Improve Sales Effectiveness

           Improve Customer Service/Loyalty

                   Improve Communications

                          Improve Forecasts

                 Provide Current Information

                          Increase Revenues

                       Support Team Selling

                        Increase Selling Time

                 Improve Sales Management

             Improve Marketing Effectiveness

                            Increase Margins

                        Decrease Sales Costs
                                                0%      10%        20%        30%          40%            50%       60%        70%
                                                                          Percent of Survey Respondents




                                                                                                                                                    3
                        FIGURE 3 -DELIVERY AND PROVISIONING APPLICATIONS RANK AMONG THE LOWEST DEPLOYED CRM INITIATIVES

                    Opportunity Manager

                         Contact Manager

                                Office Suite

                                      E-mail
                             Lead Tracking

                             Call Reporting

                             Sales Analysis

                                Forecasting

                           Internet Access

                      Proposal Generators

                Marketing Encyclopedia

                        Customer Support
4
                              Presentations
                                Order Entry

                           Back Office Link

                                Telemarket

                                    Training

                               Configurator
                                               0%        10%        20%         30%     40%        50%       60%        70%       80%          90%
                                                                                Percent of Survey Respondents



                Notwithstanding the lack of innovation, investment in             received little or no benefit from their CRM initiatives.3
    CRM continues to accelerate. For software licenses alone, global                          With these findings in mind, we believe that many
    revenues will likely exceed US $12 billion, and the global market             ongoing CRM investments will prove misguided. This is not because
    for all CRM services (consulting, integration, training, etc.) will reach     of wasteful or inept implementation of CRM packages. Rather, it
    almost US $125 billion, by 2004.2                                             is an almost inevitable consequence of the limited vision that has
                Most companies, however, say the results of their CRM             motivated many CRM implementations. Most existing CRM systems
    investments have been less than satisfactory. In a recent survey,             focus on improving sales and marketing performance through such
    only 28 percent of those responding say their investments yielded             functionality as opportunity management, contact management,
    significant improvements. The remaining 72 percent say they                   and lead tracking.4
           When companies are more focused on their internal          a customer's experience of value.

challenges and users than on creating meaningful value for                       In the communications industry, this kind of shortcoming

customers, "inside-out" thinking occurs. Ironically, a consequence    has historically been characterized more as a missed opportunity

of this kind of thinking is a failure to accommodate the customer     than as a strategic flaw. In today's competitive environment,

as a potential user of CRM solutions. Our experience suggests that    however, the inability of leading communications companies to

many CRM investments fail to deliver anticipated benefits because     develop high-value relationships with customers—especially in the

of this "inside-out" thinking by companies and their CRM vendors.     business-to-business marketplace—is a glaring strategic weakness.

           For example, when asked whom they targeted as primary                 We believe the traditional CRM model cannot meet

users of their CRM solutions, more than 90 percent of the Fortune     the needs of tomorrow's communications companies. CRM as it

1000 companies identify not customers but field sales personnel,      is currently conceived simply cannot deliver the true benefits

followed by sales management and marketing. With this inside-out      companies and their customers want.

perspective, it is no wonder CRM initiatives fail to significantly

enhance the customer experience.

           Similarly, when asked about the implementation

challenges they're facing, companies overwhelmingly emphasize

managing internal resistance, defining system specifications, user

productivity, and process management—rather than focusing on

customer-centric solutions. Our research shows that delivery and

provisioning functionalities rank among the least likely CRM

applications to be deployed. Functionalities such as proposal

generation, order entry, and product configuration—tools that

provide customers ready access to both the products and the
intellectual capital of the organization—have taken a backseat to

opportunity management, lead tracking, and sales analysis.

           The intense emphasis companies place on incremental

performance improvements can lead to other strategic

miscalculations as well. When managers are challenged to deliver

quick returns, they tend to focus on new revenues and cost

reductions at the expense of strategic functionality. In this

environment, the priority goes to applications that improve cross-

selling performance, rather than service delivery itself. In this

environment, managers reduce costs by focusing on customer

service representative (CSR) productivity or systems maintenance,

rather than investing in applications that can dramatically enhance


                                                                                                                                            5
    The Evolution of CRM
            The Evolution of CRM
                       Most communications companies' strategies have               online advisory services empower buyers to specify, customize,

            evolved from a network-centric model designed to cope with              and purchase services through easy-to-use configurators and other

            few competitors, simple products, and unsophisticated customers.        needs-based tools. Following initial VPN purchase, for example,

            Traditional network operators sell mass-market products and             ongoing customer interactions feed a value model that creates

            services to anonymous customers based on general assumptions            superior product solutions throughout the customer relationship

            of what customers will value. Systems are designed to maximize          life cycle. A customer configuring a number of different extensions

            delivery speed and lower costs. Service providers present a steady      to their network might find dynamic access to subject matter

            stream of new information to customers with the hope of cross-          experts and alternative configuration suggestions. In this way, all

            selling complementary products and up-selling new generations of        elements of the organization can now collaborate to sustain lifelong

            products. Operations staff scrambles to react to service problems       relationships by continually delivering better customer outcomes.

            and placate angry customers, hoping to maintain their grip on                      Another source of pressure that shifts dramatically with

            the customer relationship. It is this kind of thinking that leads to    the new reality is time-to-market. Traditional network operators have

            endless debates within larger communications firms about who            profited from product innovation and continuous improvement

            owns the customer, rather than who adds value to the customer's         in operational efficiencies. Service providers monitor operations

            experience.                                                             benchmarks and best practices on an ongoing basis, while the
6
                       This kind of thinking also has resulted in a willingness     technology infrastructure is improved to increase speed and lower

            on the part of many communications companies to settle for              costs.

            incremental improvements to CRM tools and technologies. Although                   But in today's ever-changing competitive environment,

            these improvements have occasionally yielded performance                new entrants are profiting from customer innovation and service

            enhancements, they have not delivered returns commensurate              reinvention. Service providers are focused on customer outcomes—

            with the significant investments large communications companies         preparing to satisfy new customer demands as soon as they appear.

            have been making. And if traditional CRM has fallen short in the        Companies are engaged with customers' real-life experiences, using
            past, it has even less potential in today's dynamic communications      empowerment tools to understand customer goals and deliver the

            marketplace.                                                            unique product bundles and features customers need.

                       This new marketplace is marked by a dizzying array of

            new challenges. From the minefield of global regulatory policies to

            the daily introduction of new products and services, sustaining solid

            relationships with high-value customers is harder than ever. Not

            only are more and more competitors targeting the best customers,

            those customers themselves have more knowledge and higher

            expectations.

                       Market-leading      communications       providers    are

            responding with initiatives that create the flexibility necessary to

            meet the unique needs of individual buyers. Interactive media and
           Even the role of technology shifts—moving from a focus                        Whereas the old reality is primarily about managing

on customized service provision to a focus on tools that enable             customer relationships, the new reality is about enhancing customer

customers to create for themselves the products, services, and              value. In response, a robust set of next generation CRM tools and

experiences they need to be successful. In the old reality, a web           strategies has emerged. These tools enable customers to manage

site is a channel that facilitates transactions with suppliers and          their own product and service portfolios actively, while also enjoying

links to customer service. In the new reality, the Internet becomes a       complete transparency to network operations. With its sharp focus

personal resource that enables a multi-company team to contribute           on customer empowerment. This represents a new model for

in real time to meeting a customer's needs.                                 companies seeking real and sustainable competitive differentiation,

                                                                            as shown in the following table.


                                                      FIGURE 4 - THE EVOLUTION OF CRM

        The Old CRM Re lity               The Ne                                           Next Generation CRM Results
                                               ea ity
                                by                                  que             Co

                                           s                     o                   r
                                           indiv dual customer n eds                    ri
                                                                                        ri
                                                                                    of erin s t custom r n eds

                                                                                    Ra                               -               o
                                to e
                                to         i                 ver of the             co
        deli ered                          prod cts and services they               in entive t                hei       mbent next
                                           choose                                                                           er hurn
                                                                                    and ac ess to

        CR sys em de ign d to                                                       Comp nie mo            ay ro     co mo       bas d
        ow r c s s                                    to e ha ce
                                                      to                            bu

                                                                                    pr
                                                                                    deplo me          re iu    pr duc s a d services

                                                                                    Cu                                                   ce
                                   ry
                                an ry      r                                        wi
        customers                                                es
                                                                 es
                                           supe ior ust me outcomes                 becomes       ore              tim   sult:
                                                                                    co              a r er n t e o m o t cus omer
                                                                                    ex

        Tec nol gy esi ne for              Tech olo y t ols hat ena le              Custo ers decide t eir wn pri            for their
                    rv
                    rv
                ed ervi e                  c         to
                                                mers to ng ge i sel -               in
                                           s    e
                                                                                    cu

        Co pa              t                                                        Dr ma            han       alu               mer and
                                           s              ver       ica t
                          ith
                                                                                    ef




                                                                                                                                                     7
    The Competitive Advantages of Next Generation CRM

            The Competitive Advantages of Next Generation CRM
                       A new generation of communications start-ups has             2. On-demand provisioning.

            focused on next generation CRM as a market differentiation strategy.    With on-demand provisioning, customers manage key parameters

            Wave B Telcos, as well as traditional channel competitors and           within their own networks in real time using customer-friendly

            content providers, are already entering the market with dramatically    tools. Operators enjoy lower network management costs because

            shortened realization windows. Starting with blank slates and no        customers are empowered to manage their own needs.

            legacy systems, they are designing organizations around the next

            generation CRM market imperatives—and achieving rapid market            3. Leveraging communities of interest.

            growth. From utilities such as Enron, Duke Energy, Vivendi, and         Community-based service provides rapid dissemination of expertise

            British Gas to software and portal providers such as AOL, Microsoft,    to customers, leveraging the shared knowledge of the entire

            and T-Online, the threat of new competition is real.                    community and reducing the burden on the service provider.

                       These new competitors have been able to exploit the          Innovative web service delivery methods— chat, video, voice-over-

            rich functionality of next generation CRM to attack once unassailable   IP— allow operators to ensure that the right medium is available for

            incumbents, competing on the basis of customer service and              the appropriate information need and customer preference. The

            flexibility rather than asset intensity and network ownership.          customer gains access to the full portfolio of expertise available

8                      Incumbents can defend against new entrants by                throughout the service provider organization.

            leveraging their eBusiness investments in marketing and customer

            care to build a next generation CRM capability. The requirements for    4. Familiarity through personalization.

            technical architecture can generally be achieved through systems        Personalization enables next generation CRM adopters to create

            and process evolution, thereby retaining the value of legacy            a familiar customer experience. Each unique customer user enjoys

            technology investments. These new tools and technologies enable         a customized user interface— receiving tailored messages based

            communications companies to shift customer relationships                on his or her individual profile. Ongoing feedback tools such as

            dramatically to a higher-value plane—to profit from, rather than be     utilization tracking and customer surveys enable the operator to
            threatened by, this industry inflection point.                          refine the portal continuously, increasing familiarity and enhancing

                       Adopters can achieve significant competitive advantage       the value of the customer's overall experience. Customers end

            quickly on seven key dimensions of customer value. Each of these        up with provider-specific knowledge and access tools that create

            dimensions represents a unique opportunity to both enhance the          barriers to switching.

            experience of customers and improve operating efficiency.

                                                                                    5. Opportunity management excellence.

            1. Customer-based complex configuration.                                Next generation CRM opportunity management creates the basis

            Customer-based configuration allows customers to respond to             for an effective and sustainable selling process designed around

            their own needs—enabling quicker, on the spot response.                 customer needs and enabled by customer interactions.

            Customer-based configuration also generates the lowest cost

            solutions by optimizing the configured network. Integration with

            provisioning and order entry systems further shortens sales cycles.
6. Order management.                                                 inquiries receive real-time attention—and operators avoid the use

Streamlined order management guides customers through an             of higher-cost channels for problem resolution.

unhindered high-value buying experience. The next generation                    The difference between truly adopting customer-

CRM Order Management System makes complex ordering simple            centricity as an operating philosophy and pretending to do so is

using logical configuration and intuitive order processing. Order    significant. Compared to their non-customer-centric counterparts,

progress is communicated well before customers have to ask for it.   companies that adopt customer-centric strategies deeply realize

                                                                     superior business performance in sales growth, pretax return on

7. Targeted customer service.                                        assets, market share, and percent of revenue from raw products.4

Deep adoption of next generation CRM practices means that

targeted customer service addresses customer problems instantly.
By integrating next generation CRM all the way to the customer,




                                                                                                                                         9
The Value to Customers: Seven Next Generation CRM Scenarios


      The Value to Customers: Seven Next Generation CRM Scenarios

       Product and Service Configuration                                   upgrade releases, service requests, and account status is
                  Using the Next Generation CRM Product                    instantly available. When customer finance personnel also
      Configurator, a prospective IP-VPN customer visually designs         access the system, they are alerted to appropriate cost, usage,
      and configures the required network. A bill of materials             and billing data in a format that can be easily incorporated
      complete with customer-specific pricing is automatically             into their financial tools.
      inserted into a proposal, which is presented to the potential
      customer in real-time. Upon proposal acceptance, the bill            Opportunity Management
      of materials and pricing information are automatically                            An account team with representatives from the
      forwarded to back-end business systems. A set of flexible,           operator and its channel partners is pursuing a global
      manageable business rules direct network configuration and           prospect. Using the Next Generation CRM Online Opportunity
      work management processes, allowing the new customer to              Management System, all contacts with the prospective
      add new products and services quickly, as required.                  customer are logged and tracked. Key insights, along with
                                                                           all presentation and proposal materials, are shared across the
      On-Demand Provisioning                                               full account team. The multi-faceted account team is able to
                   The customer is experiencing higher than expected       provide a single consistent image to the prospective customer
      peak traffic on their network and requires an increase in            —and is able to respond to their enterprise-wide requirements
      the peak bandwidth threshold for certain key pipes. They             in a manner and time frame that their competitors cannot.
      access their personalized space within the web site and review       Sales managers for both the operator and the channel can
      performance statistics for the affected links. They adjust the       access the opportunity management system to receive a view
      peak traffic thresholds, within their SLA limits, to accommodate     of all opportunities around the world in which they have a
      new requirements. These changes are automatically made to            stake.
      the network and an audit trail is generated. The customer
      can continue to modify system parameters as requirements             Order Management
      change.                                                                          A customer completes an online order for a
                                                                           complex VPN, which is automatically validated and delivered
      Leveraging Communities of Interest                                   to the Next Generation CRM Order Management system for
                 Your communications company has developed a               decomposition and management. At each logical stage in the
      new product and is planning to release it to customers. A            fulfillment process, the customer is kept up-to-date through
      marketing campaign about the new product has been pushed             the web interface or e-mail with relevant status information.
      to sales and technical representatives within the channel. A         The customer can also access high-level workplan and status
      web seminar has been scheduled. During the seminar, channel          information through the web site, which is integrated with the
      representatives across the globe interact with the company's         operator's project management tools.
      product managers and, after a few hours, are ready to go to
      market with the new offering. Following the launch, engineers        Customer Service
      from prospective customer organizations engage in an online                      A customer who needs information about VPNs
      discussion with channel technical specialists about the new          retrieves technical information from the web site. An inventory
      product.                                                             of FAQs that address the most common customer questions
                                                                           is available. The customer has access to the operator's entire
      Familiarity through Personalization                                  portfolio of expertise. If the customer encounters a technical
                   A customer technician logs onto a secure space          problem, an online step-by-step guide is available through the
      within the web site, activating the customer's profile and           portal to help resolve the issue. A "call me" button is available
      personalizing the online experience. The features and                throughout the customer's web session in the event a support
      information that the customer uses regularly are made readily        technician is required.
      available, greatly simplifying site navigation. A complete profile
      of the customer relationship, including information such as
                                                                                             The Next Generation CRM Approach

The Next Generation CRM Approach
           Successful next generation CRM initiatives are designed                      For incumbent communications companies, this can

around an integrated set of customer-centric practices. That is             be challenging. Most incumbents are already engaged in a host

what is meant by, "from the customer to the network, and back               of disparate CRM-related initiatives—call center enhancements,

again." And as leading communications companies embrace these               sales force automation, customer data consolidation, service quality

practices, they are rethinking even their most basic approaches and         programs, CSR training, billing improvements, provisioning upgrades,

assumptions about their markets. With next generation CRM, every            and more—each of which may fall under a different organizational

major business process and system is available to the customer,             mandate. Without a clear next generation CRM strategy and vision, it

driving end-to-end solutions that result in real-time implementation        is impossible to integrate these initiatives into a seamless coherent

of services and network elements.                                           strategy.




                                       FIGURE 5 - MANAGING OPPORTUNITIES ACROSS THE ENTERPRISE
                                                 The list of opportunities with account names, site names, etc....




       Sales funnel stages:                                                     Proportions of opportunities in each stage
       Must be tailored to company and customer                                 of the sales funnel. Actuals are presented
       needs.                                                                   against quotas.

         THE MULTI-FACETED NEXT GENERATION CRM ACCOUNT TEAM IS ABLE TO PROVIDE A SINGLE CONSISTENT IMAGE TO THE PROSPECTIVE CUSTOMER—
             AND IS ABLE TO RESPOND TO THEIR ENTERPRISE-WIDE REQUIREMENTS IN A MANNER AND TIME FRAME THAT THEIR COMPETITORS CANNOT.




                                                                                                                                                    11
                In the area of provisioning, for example, next generation    delivers benefits primarily to the communications provider through

     CRM solutions must be integrated with order management and              lower costs of operations and improved customer data.

     network resource management systems to ensure that what is                                                An alternative view—the win-win approach—embraces

     ordered is provisioned. Such a provisioning system must be vendor       next generation CRM as a customer empowerment strategy in

     and network neutral, and must provide real-time flow through            which customers become fully engaged in their own fulfillment and

     for customer-driven access to bandwidth via the next generation         management of products and services delivery. Mutual benefits

     CRM web site. In practice, this means that customers must have          accrue to customers and operators alike, resulting in faster delivery

     transparent views and access to all network elements, regardless        and problem resolution, knowledge transfer, and needs-based

     of manufacturer or service provider.                                    products and services.

                Indeed, providing customers with access to their service                                       Customers know the difference. To be successful, next

     portfolios is a key driver of much next generation CRM functionality.   generation CRM must add meaningful value—not simply exploit

     As such, next generation CRM solutions are designed as service          the customers as a labor source. There is a fine line in the customer's

     portals that allow customers and channel partners alike to access       mind between shifting the source of work (and cost of labor) and

     the companies' business systems and network architecture. These         providing truly enhanced customer value.

12   portals provide customers with real-time views of account status,
                                                                             FIGURE 6 - NEXT GENERATION CRM IS NOT A THEORETICAL EXERCISE.
     orders, and pricing, as well as online provisioning and management                 COMPANIES THAT GET IT RIGHT DELIVER
                                                                                        SUPERIOR PERFORMANCE FOR SHAREHOLDERS.
     of their bandwidth needs. Customers also can review and pay bills,                                  60%

     track progress on trouble tickets, and monitor service levels.
                                                                                                         50%
                Beyond providing transparent customer access, next

     generation CRM solutions also support the community of interest                                     40%
                                                                              shareholder return goals




     among operators, customers, and suppliers. This is especially
                                                                                 Percent exceeding




                                                                                                         30%
     important for corporate customers who use the next generation

     CRM portal as a communications channel for service coordination,                                    20%

     problem resolution, and utilization planning. And for operators,
                                                                                                         10%
     the portal provides a dedicated link for communicating directly

     with individual users within a corporate account. The portal is ideal                               0%
                                                                                                                   Customer-Centric     Non-Customer-Centric
                                                                                                                     Companies               Companies
     for delivering targeted messages and guiding customers through

     sales, service, and configuration processes.

                Wearing a cost-reduction hat, it is easy to see the

     potential for lowering sales and service costs through next

     generation CRM. Customers effectively become zero-cost employees

     responsible for orders, trouble ticketing, and profile maintenance.

     This kind of thinking— which we call the win-lose approach—
Some Practical Implications of Next Generation CRM
            Companies cannot adopt next generation CRM without             Fast, fluid and flexible. Next generation CRM adopters offer

understanding the organizational and technological implications.           market-defining products and services to customers in near real

Technologically, next generation CRM affects essentially all aspects       time. They build in capabilities to provide rapid product design and

of a communication company’s architecture (see inset on facing             deployment, with an organizational architecture that reflects near

page).   Organizationally, it represents a dramatically different          real-time changes to the underlying network to meet customer

strategy from CRM for getting close to customers—and it spans              needs.

the entire enterprise.

            Market demands across traditional functional disciplines       A customer-centric approach. Customers want products that

such as billing, provisioning, and network management have raised          meet their needs. They want the ability to manage their own

the competitive stakes for time-to-market and customer service,            service portfolios. They are not interested in analyzing competing

forcing operators to innovate in the areas of customer service             component-level prices. Adopters recognize this need for value-

and delivery— without losing sight of the basics. Attracting and           added delivery with services received transparent to the customer.

retaining the most profitable customers is still the name of the

game.                                                                      Best-in-class capabilities. Next generation CRM enables

            Traditional CRM solutions are not sufficient to deliver        operators to respond quickly to market opportunities and resolve

this critical functionality. Now in their third generation of refinement   issues that affect customers. Customers gain the ability to change

and sophistication, CRM solutions simply do not address the                or enhance elements of their portfolios quickly as their needs

critical provisioning and self-service functions required in today's       change. All parties benefit from a shared view of operations and

marketplace.                                                               offerings.

            We have identified key characteristics that companies

must exhibit to excel in next generation CRM adoption.




                                                                                                                                                  13
     Customer self-service. Technology enables customers to view                             The "customer value" in next generation CRM is a

     all aspects of their business relationship with the operator. This          two-sided coin. On one side, customers reap gains through their

     solution for customer self-management and collaboration is central          enhanced experience—faster service, needs-based, customized

     to next generation CRM success.                                             solutions, and better communications. On the other side, operators

                                                                                 benefit from being able to reduce provisioning and service costs,

     A focus on the basics. Tight control of network deployment costs            deploy new products and services quickly, garner a larger share

     and management of razor-thin margins is critical. Next generation           of a customer's lifetime value, and truly know more about their

     CRM enables traffic aggregation and managed connectivity with               customers' needs.

     a view to real costs and opportunities associated with individual

     customers at their unique service levels.




14                           FIGURE 7 - NEXT GENERATION CRM FUNCTIONALITIES GO BEYOND TRADITIONAL NOTIONS OF CRM

                      Major                                           Major                                             Major
               Next Generation CRM                             Next Generation CRM                               Next Generation CRM
                    Functions                                       Processes                                        Capabilities




                        r




                             SEVERAL CRITICAL FUNCTIONS, PROCESSES, AND CAPABILITIES MADE AVAILABLE THROUGH NEXT GENERATION CRM.
                                                                            Technology Implications



Technology Implications

           Throughout the next generation CRM adoption curve, executives

must rethink their fundamental business propositions. The key outcomes of

this rethinking must address the following:



Network architecture

  •   Bandwidth on demand—at any scale

  •   Aggregated bandwidth procurement

  •   Flexible network design— both core and customer premise

  •   Global connectivity



Service architecture

  •   Message-based architectures

  •   Unified global delivery capability

  •   Access from anywhere for costs approaching those of a local call

  •   Application hosting and e-Commerce platforms



Systems architecture

  •   Data shared across all systems

  •   Minimized time-to-market lags

  •   End-to-end automation

  •   Systems uniquely integrate networks, organizations, processes, and

      partners



Process and organizational architecture

  •   Optimized around time-to-market issues

  •   Projects do not differentiate between network, service, product and

      customer

  •   Offerings designed as building blocks that can be assembled rather

      than "one-size-fits-all" offerings
     Next Generation CRM Market Imperatives

           Next Generation CRM Market Imperatives
                      Next generation CRM strategies represent a significant        2. Break the strategy dilemma between high quality and low
           opportunity for companies that want to win in the battle for             cost delivery.
           customer intimacy. We have identified four market imperatives for        Traditionally, the low-cost provider position has precluded other
           such companies considering next generation CRM adoption.                 differentiated market strategies. But adopters have the opportunity
                                                                                    to establish themselves as leaders on several fronts. Next generation
           1. Create a sustainable solution.                                        CRM enables product differentiation, superior service quality,
           All major communications companies will likely evolve toward             and low cost/price positions to converge. As such, delivers the
           next generation CRM. And while being first is important, doing it        compelling advantages of service quality leadership— without
           right is even more important. This means defining an engaging            the attendant costs and headcount of the traditional model.
           customer experience that is sustainable over the life of a customer      Additionally, ever-increasing volume across the next generation
           relationship. We believe sustainable approaches hinge on an              CRM system will continue to drive transaction costs down.
           operator's ability to innovate rapidly, upgrade delivery standards,
           and execute complex solutions quickly.                                   3. Defend against new forms of competition.
                      S PEED : Success in rapid innovation requires speed of        We know that competition within the communications industry is
           functional iteration, speed of delivery, and speed of feedback.          changing dramatically. Not only are competitors migrating to new
           And an operator's ability to sustain this capability requires rapid      positions throughout the value chain, most companies are also
16         processing of customer and channel feedback. Incorporating that          attempting to move closer to customers in general. Carriers are
           feedback to continuously reinvent and uplevel the customer               developing flexible networks and supporting processes to ensure
           experience is the final link in the innovation chain. We believe         that their product and service portfolios can change with the
           competitive pressures will drive down the time-to-order, provision,      changing marketplace and remain competitive.
           and fulfill customer needs—and without an institutional
           commitment to rapid innovation, operators will be left behind.           4. Target existing customers.
                      R EDEFINING   DELIVERY :   A sustainable next generation      Customers act as their own filter: sorting the few meaningful
           CRM strategy requires ongoing redefinition of the customer               opportunities offered to them from amid the noise of mass
           experience with a continuous drive toward higher value. By               marketing. Robust information used in predictive behavior analysis
           engaging customers in a way that provides complete visibility to         enables companies to finely tailor the message sent to individual
           their portfolio and the network, rapid adopters have the ability to      customers. Additionally, these models enable carriers to identify
           start significantly ahead of competitors.                                proposal opportunities proactively within a customer base, often
                      C OMPLEXITY    OF DUPLICATION :    In most cases, next        before the customer has identified the need themselves.
           generation CRM requires a fundamentally new approach
           throughout the enterprise. Next generation CRM touches delivery
           of products and services, as well as the organization necessary to
           support that delivery. As next generation CRM capabilities evolve,
           late adopters will find it increasingly difficult to respond to agile,
           lower-cost delivery models.
             One example comes from a European mobile operator.
They raised the question: How do we leverage the enormous
amount of data we collect to provide a unique and profitable
customer experience? The answer was a combination of predictive
behavior analysis and proactive proposal generation. This operator
uses the combination of call detail data, demographic, and use data
to score each customer along all dimensions of their relationship.
Profitability, value, and behavior are all cataloged to create a unique
customer profile. These profiles become the basis for proactively
tailored, one-to-one marketing campaigns, delivered directly to
their handset. As a result, this operator has been able to reduce
churn significantly and increase the average profitability of mobile
customers.




                                                                          17
     Next Generation CRM in Action: The ipulsys Case Study

             Next Generation CRM in Action: The ipulsys Case Study

                         ipulsys is a Wave B communications company providing                  The ipulsys strategy also supports a number of "first

             web-enabled IP solutions for global business-to-business               mover to the customer" principles. For example, the firm's market

             communications. Among all the next generation CRM initiatives          leading systems are designed to serve channel partners and

             underway throughout the world, we believe the ipulsys initiative       customers, while developing a solid base for creating and launching

             best reflects the potential of next generation CRM strategies to       new products and markets. Rapid implementation was also a top

             generate sustainable competitive advantage.                            priority for ipulsys. The company built in the ability to develop new

                         Founded in 1998, ipulsys markets and sells its services    functionality quickly through its customer empowerment solution

             directly to businesses and indirectly through a sales network of       (iCE) that continually anticipates the next breakthrough in customer

             partner telecom operators. Headquartered in The Hague with offices     need fulfillment.

             in Paris and London and it's SOC in Amsterdam, ipulsys focuses

             on the business-to-business needs of multinational corporations.       The ipulsys Implementation Strategy

             The impulsys business vision is based squarely on the promise of                  To achieve its strategic objectives, ipulsys developed

             next generation CRM, as evident in the ipulsys' belief in "a vision    a business solution with its systems in mind. Specific system

             of empowerment, not ownership."                                        requirements included seamless integration, a consistent business

18                                                                                  data architecture, an enterprise-wide business data model, a

             The ipulsys Growth Strategy                                            message broker architecture, the elimination of manual interfaces,

                         ipulsys' growth plans adhere to the discipline of          validation and error correction, leveraged package applications,

             providing products with a cost competitive advantage with              organization independent architecture, an innovative product data

             complete operational transparency—a discipline that is entirely        model, and quality metrics embedded in all systems. The impacts of

             consistent with the practice of deep next generation CRM adoption.     these requirements on the total system architecture are profound:

             Specific ipulsys business objectives include:                            •   Applications inter-operate across network links, despite

               •   Creating new and innovative telecom services deployed on               differences in underlying communications protocols, system

                   a pan-European basis;                                                  architectures, databases, and other application services;

               •   Establishing the significant scale economies of service in the     •   Application architectures tie together data sources and

                   market;                                                                systems through a data exchange and transformation

               •   Creating an end-to-end architecture that enables rapid                 mechanism that decouples applications from one another;

                   (hours, not months) introduction of new products, services         •   The cost of maintaining interfaces is minimized, while

                   and tariffs;                                                           permitting the greatest level of flexibility in responding to

               •   Owning a leadership position as one of the highest quality,            changing business needs.

                   premium communications providers in the world.
           ipulsys' next generation CRM-based business model                        Today, there is not a single competitor in the IP arena

required the skillful integration of business and technology solutions   offering the level of next generation CRM skills and systems

around the dynamic needs of channel partners and customers.              delivered by ipulsys. The company has achieved a "concept-to-

Seamless interaction among data architectures, business rules, and       customer" cycle that is a fraction of that delivered by competitors—

organizational designs were essential.                                   and now operates with a cost advantage to competitors in the

           To deliver against the company's aggressive market            marketplace. In ipulsys, we see that while the characters in

launch schedule, a flexible, proactive and iterative approach was        our fictional Schillinger-GlobalCom vignette may not be real, the

essential. From solution architecture through application delivery       promise of next generation CRM is here today.

and process integration, ipulsys went from concept to creation in

five months.




                                                                                                                                                19
                                                                             ipulsys Service Offerings



ipulsys Service Offerings


 •   netpulse—Virtual Private Networks (VPN) provides secure, managed, CPE-based virtual private

     networking to multiple sites belonging to one or more customers over the IP/ATM backbone.

     Virtual Private Dial Networks (VPDN) enables remote users to access their corporate networks

     via secure dial-up connections.

 •   transpulse—IP Transit is designed to provide high-capacit y Internet service providers (ISPs)

     with a variety of connectivity options to the public Internet. Connection points can be in

     London, Amsterdam, and New York depending on the needs of the customer.

 •   citypulse— City-to-City Bandwidth provides access to the core of the ipulsys ATM cloud for

     other carriers connectivity to serve carrier end-customers

 •   unipulse— Unified Messaging provides managed "mailboxes" that allow seamless access to

     voice mail, e-mail, fax, and WAP/SMS facilities. The unified messaging platform provides nearly

     "any-to-any" connectivity and routing options required.

 •   ANXpulse— Certified IP-based connectivity to the North American ANX community as well

     as to the European automotive market. ANXpulse supports business-to-business extranets,

     guaranteed SLAs, security, and performance requirements.


ipulsys Vision


     To become a customer-centric organization where competitive differentiation is totally web-

     enabled. In order to achieve this positioning, ipulsys needs to provide systems and processes

     that empower customers and provide control over their IP communications portfolio, allowing

     secure and easy access to the ipulsys network and management systems 24x7, multi-access to

     service information, enabling them to monitor network performance, order changes in service

     provisioning and bandwidth, track fault resolution and project management progress, review

     billing, collect a variety of management reports, … as though it were a fully owned network.

     All of this, online in real time.
                                                                                                     The ipulsys experience …

The ipulsys experience...
            Customers begin their interaction with ipulsys through iCE: ipulsys Customer Empowerment. Once identified, they manage

their complete experience through the web.
                      FIGURE 8




                      IPULSYS’ ICE PROVIDES COMPLETE CUSTOMER MANAGEMENT

           A quote can be requested, a proposal offered then accepted, and an order placed then confirmed—all within a few moments of

engaging through iCE. In many cases orders can be provisioned in real time as well. In others, all information is available to the customer

to track progress as it actually happens.

                      FIGURE 9




                       ORDERS ARE ENTERED, TRACKED & PROVISIONED IN REAL TIME




                                                                                                                                              21
                In real time, additional product information can be requested, network faults identified, and trouble tickets raised. All engineering

     activity and responses to inquiries are transparently, immediately available to customers.


                             FIGURE 10




22
                            SERVICE FAULTS LOGGED & TRACKED IN REAL TIME
Why Next Generation CRM Works


Why Next Generation CRM Works
           Next generation CRM enables forward-thinking companies

to break the strategic dilemma between superior quality and low-cost

delivery. The additional benefit of creating challenging barriers to

entry for less visionary competitors makes it an even more compelling

investment strategy.

           But more important than its operational and technical

advantages is the customer-centric imperative on which next

generation CRM rests. That imperative simply cannot come into play

using traditional CRM models that push products and services to

unsuspecting customers—often with marginal business results.

           Next generation CRM solutions focus on the customer

as their primary user—enabling familiarity, customization, and self-

service that serve customers on their own terms. Customers gain

control over the things they rightly should manage—their own

portfolios of products and services—and enjoy complete transparency

to the things that are not in their control. Next generation CRM is a

winning, customer-centric strategy that will produce superior returns

and sustainable market leadership.
24
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