Ian Smith, Oracle's UK managing director and a former head of BT's customer service operations, has been trying to register for online share trading.
"Last week I filled in a form on the web, then I got the same form through the post to fill out in ink. That makes me nervous. It says to me that there's no connection here between their internet channel and their correspondence channel - it's sending the signal that the internet is a bolt-on."
Smith, who in previous roles with Digital and BT, has spent 30 years managing customers, doesn't blame poor customer relationship management (CRM). The problem, he says, is that CRM techniques and systems are applied only to one type of customer interaction at a time - in effect, the left hand of customer service not knowing what the right hand is doing.
But that, he adds, is the way most CRM applications are built.
Just as you thought it was safe to throw your weight behind traditional CRM, it's under attack from analysts and users alike.
Still up to the job?
Analyst Ovum warned last year that companies should delay their customer relationships projects for at least a year, until software vendors can provide applications that integrate back-office customer data with front-office tools to use that data, or else much of the value of CRM will be lost.
Forrester Research joined the attack with its damning report, 'The Demise of CRM. It has a simple conclusion: "The CRM applications [customers] expect to use aren't up to the job," it said, boldly.
The reason that CRM isn't working, says Forrester, is that traditional customer relationship applications are built to automate a single customer channel and don't use information from, for example, interactive voice recognition systems, the phone, mail order, and most importantly, the web. Simply installing CRM software from specialists such as Siebel or Clarify, it says, doesn't solve tomorrow's customer service problem.
This bigger picture that uses the customer - not the interaction - as a starting point, is mainly referred to as 'enterprise relationship management' or ERM.
But depending on who you speak to, it also crops up as e-relationship management (eRM) or internet relationship management (iRM). These are probably acronyms we could do without.
Cap Gemini, which has worked on ERM systems for BT Cellnet, among others, says that companies are taking a risk if they fail to start planning now for this 'bigger picture'.
"Many companies we work with assume customers always want to ring the call centre," says Caroline Mansley, Cap Gemini's head of CRM. "Your best customers will want a variety of channels and want the same standard of service from each. For example, in banking it's great to use a call centre, it's fantastic to use an online bank and it's wonderful to use an ATM. But banks have provided only some services on some channels, and customers demand the same service on all channels."
When the MM Group, a Bristol-based call centre specialist, divided its customer service into specific teams, its aim was to improve customer service - but it had the opposite effect.
"When someone called who had contacted us via a different route a few days previously, we had 'corporate amnesia'," says Stephanie Rouse, business development manager for the company, which works for The National Blood Service and Marks & Spencer, among others.
Customers were forced to explain not only the reason for their call, but what had happened in their previous email, fax or interactive voice call. "Ten years ago CRM was a linear activity. Now it has to be holistic," Rouse says.
Her solution was to use software supplied by Aspect Communications, which effectively tied all those customer applications together in a browser-based 'customer relationship portal', so that all the customer interactions are available on one page.
MM Group also used Aspect's application to develop rules for handling all customers' interactions. "If a phone call comes in we have business rules for how quickly it should be answered, with messages to be played when someone is on hold," Rouse says. "Email and fax messages should be exactly the same."
"Traditionally, all email goes into a huge bucket to be answered when there's time. But you can impose rules to monitor this. For example, if you have a two-hour response time, you can automatically send a message after one hour 50 minutes apologising for the delay."
Just the job
But perhaps the biggest shift in MM Group's thinking has been in the way it organises its staffing. Customer management for different media, such as fax and phone, is now being integrated, so there is one central customer service team. Because customer interaction is now presented in a central system, jobs can also be allocated centrally.
"In a call centre you typically staff the phones to satisfy 95 per cent of peak demand and expect to lose a few calls. Instead, we're moving to staff at 120 per cent of peak demand, and fill the agents' slack time with other tasks like answering mail and fax. Then we never lose a call," says Rouse.
The immediate problem for Rouse is to find the right type of agent. "You now have to multi-skill them. We've recruited people who are good at talking on the phone. Now we have to find people who can spell and type as well."
MM Group's ERM skills will be sorely tested this year thanks to its latest client: the company has just taken over managing customer relations for the UK Passport Agency.
But is enterprise resource management really a must-have for your company?
No, says David Berger, managing director of call centre consultancy Callcentric, which works for clients including Lloyds TSB and Credit Suisse. He says that we have yet to integrate customer relationship management into call centres, let alone the internet. "Ninety-five per cent of all call centres are a waste of time," he fumes. "All they do is annoy their customers."
"And there's no such thing as customer service on the internet," he adds. "In this kind of environment, it's a waste of time to be considering ERM, because there are so few core standards for it to build upon," he says.
Lynne Harvey, an analyst with the Patricia Seybold Group, is equally scathing of our attempts to offer good customer service across all channels.
"CRM is everyone's buzzword. The market is flooded with CRM analytic application wannabes, yet there are still few applications that attempt to use customer-facing data from multiple sources," she says.
The most obvious result is that while callers on the phone may see the effects of customer relationship systems, the same customers are getting terrible service over the internet. Jupiter Communications reports that in a Christmas survey of European retailers, 65 per cent did not respond to a simple email query within 48 hours.
One step ahead of the rest
Not surprisingly, vendors have already jumped on the speeding bandwagon of ERM. Oracle is just one of several companies - Clarify, SAP and Siebel are others - urgently reworking the tools needed for customer relationship management, promising ERM-style functionality in its Oracle 11i applications later in 2000. To do this, they have been forced to abandon client/server architecture.
Smith says viewing multiple sources of customer data through an internet-style front end is the only way to achieve these service goals. "How do we begin to integrate these interface points?" he says. "And how do we make a system that's flexible enough to change? Look at Yahoo or Amazon. Those companies are adapting their customer relationships on a daily basis. To do that, they have to tinker with their ERM applications constantly. Tinkering with your application is OK, but you can't do that with traditional CRM."
It's a point supported by ERM convert Mike Silvey, managing director of RiverSoft, which makes software designed to keep networks from failing. He has a considerable amount of contact through the web with customers, and knew that an ordinary customer-based application was not flexible enough to cope. "There's so much consultation involved in a traditional CRM application," he says.
"You have to configure your application, then you're stuck with it. We have the ability to constantly change our workflow for customer support, which we need, because we are still learning."
RiverSoft chose ERM startup Octane, one of a number of young companies - many staffed by defectors from traditional CRM suppliers - to have produced internet-based software for ERM. While Oracle, Siebel and others prepare ERM products, some of these smaller startups have used internet technology to start from scratch.
"Our founders all came from first-generation CRM companies," says Jim Lambert, director of corporate marketing at Octane, which specialises in personalisation for the internet and is in the throes of being acquired by E.piphany. He says companies will soon see a radical change in the number of customer interactions they need to manage, and customer management software cannot be evolved to match those demands.
"Scalability in the traditional CRM environment might mean being able to handle 10,000 calls a day," he says, "We have an account that handles 700,000 interactions every day. This is internet scalability and customer-facing applications need to be able to cope with internet scalability. That means making changes on an hourly basis - changes to the way you handle customers. We can make changes to the way companies work with their customers on a real-time basis."
If adaptability is one challenge, then speed of installation is another.
Businesses don't want an albatross that takes years, rather than days, to set up. "The deployment of the traditional CRM system might range from between six to 18 months," Silvey explains. "We are deployed in the time that ranges between one week and three-and-a-half months." This gives users the ability to experiment with customer management projects, he adds.
Companies that handle enterprise relationship management implementation, say that one problem that can cripple ERM projects is internal company politics. Traditionally, different departments 'own' different aspects of the same customer. If the sales division runs the telephone agents, often the marketing department runs the website. Putting those databases of customer contacts together is often much harder than simply applying technology.
E.piphany, one of the first companies to develop web-based ERM and maker of the E.4 ERM suite, says this is just the beginning of the relationship management story - simply integrating databases doesn't solve customer problems: good data is needed as well. "At the moment, the biggest problem is that all users of CRM systems think they know the customer. But they all have the wrong data, or that data is incomplete," says Tony Leach, E.piphany's executive vice president.
If that data is incomplete, he says, users will waste the opportunity to cross-sell products to customers. His example is American Express, which co-ordinates data to give agents the opportunity to sell other products to callers.
Integrating the customer service teams in your organisation is just as important as integrating your databases. When newly-launched ERM specialist Coranta was called in to help a football team, the first hurdle was gaining everyone's support in the organisation. "Glasgow Rangers Football Club had 18 separate supporter databases controlling things like hospitality and ticketing," says Gillian McAlister, one of the directors at Coranta, which advises users on how to design and install systems.
"It took us close to two years to convince them that using all those databases for customer relationship management was the way forward," she adds. "For someone like Rangers, you're not selling software, you're selling the idea."
What the future holds
But ERM might not, as Forrester predicts, signal the complete 'death' of CRM. Many enterprise relationship management specialists don't seek to install Oracle or SAP-style suites, but to add new functions or flexibility to traditional CRM back ends.
Aspect Communications, for example, is marketing the idea of an 'internet portal' - a browser-based solution to unite data from disparate sources.
But one of those sources can easily be a CRM application, says marketing manager Dave Thomson. "Siebel, Oracle - all those technologies are complementary. If we put our portal into an organisation, it might have something like Siebel running already," he says.
ERM might be a revolution, but ultimately, it's just a way of applying the same discipline to a new type of customer.
Products E.piphany E.4
Profile ERM-dedicated company founded in 1997. Nearest rival to 'old school' CRM players, offering datamart-based ERM suite. Just acquired Octane to complete web offering
Strengths Analytic datamart-style applications with good links to data stores. Rapidly acquired and strong user base
Weaknesses Relatively young company. Octane acquisition may detract from rapid product development plans
Phone (020) 7397 4141
Products Octane 2000
Profile 1997 startup staffed by CRM defectors specialising in helping ecommerce companies respond to customers. In process of being acquired by E.piphany
Strengths Completely web-focused. No legacy applications. Quick to implement
Weaknesses No long-term customers. Less relevant for predominantly bricks and mortar companies
Phone (0188) 963 7450
|Who's not yet|
Products Oracle Business Models allows users to interface CRM with Oracle databses. Forthcoming Oracle 11i ERM-style applications
Profile Database vendor concentrating on applications market with soon-to-arrive internet-based application suite
Strengths Knows market, integrates front and back office
Weaknesses No ERM applications until later this year but should be competitive at that time
Phone (0118) 924 0000
Products mySAP.com suite plus Workplace Portal
Profile ERP vendor now bolting on web-based CRM portal to link to proven back-end application
Strengths SAP customers have integrated back office applications and good access to customer data
Weaknesses Still longer development times. Non-SAP users wary of ERP-style applications. First round of web-based clients
Phone (0870) 608 4000
|Establish an across-discipline ERM team. This can be drawn from every department that deals with customers, but it must have the ability to make rapid development decisions,and enforce them across disciplines|
Move quickly - internet technologies give you the chance to prototype ERM applications and adjust them over time. Using ERM web technology, it's often quick to fix
Set standard of service goals across all types of interaction - there's no point in answering a phone in three rings, if you can't answer an email in three weeks. The customer has the same expectations of a service whatever platform you deliver service on
Know your customers - do as much as possible to identify them and begin collecting and using data coming from sources such as email. If your customers are known to you, then when your ERM applications are running you have a head start collecting customer data
Don't stop doing CRM - it can link effectively with web-style ERM applications. Web-based ERM can draw data from CRM, so if your CRM apps work, then you have a head start.
Prioritise your customers - you can't serve them all, so concentrate top-level service on profitable customers however they reach you.
| Get the back office right - those service goals are only achievable if every customer system is online round the clock. Service standards serve no purpose when the systems fail or become overloaded|
Prepare for a heavy workload - with email and web orders, the internet increases the number of customer interactions dramatically. An ERM system has to cope with many times the number of customer interactions that a CRM system does.Having the IT or human resources available to match a workload that can double over a month is essential
Promote self-service, automated technology - Abbey National answers four out of five emails automatically using software instead of people, so cut the costs of managing that customer channel. It's the only practical way to scale service while managing overheads
Upgrade your staff - call centre agents need retraining if you want them to answer email or guide users through web pages. Recruiting for a 'lowest common denominator' job description means that ultimately your service will be lowest common denominator as well. This may mean higher salaries and more selective recruitment. You have no choice - if you don't take this staff, someone else will
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